You like the ease of structuring your business as a partnership. Your partner or partners agree, and you have contributed your startup capital. You have an exciting idea to bring to the market. Filing as a partnership in Virginia is straightforward, and you are ready to open for business.
Although you are not required to adopt a document like bylaws for corporations or operating agreements for limited liability companies, it is still smart to consult a Virginia partnership agreements lawyer about what should be put in writing. A skilled attorney at Sparks Law could help draft this document to head off any future problems and ensure success in your company.
Partnerships are comprised of two or more people who agree to file documentation with the Virginia State Corporation Commission. Partners must apply for the appropriate permits and licenses, and they are generally responsible for the actions of the other partners if debts or lawsuits arise.
Under the Virginia Uniform Partnership Act § 50-73.132, owners can also elect to register a company as a limited liability partnership that offers some protection should the company accrue debts or face lawsuits. A knowledgeable local attorney could further explain the rules governing partnerships in the state.
Partnership agreements should be in writing as contracts between the owners, who agree to be bound by their terms. Virginia does not require them to be in writing, but oral agreements can lead to later misunderstandings.
People’s memories are faulty, so having a partnership agreement in writing will be critical when disputes arise. Partners should contact an attorney at our Virginia office to draft a partnership agreement that will guide the business in future decisions.
These agreements allocate duties and responsibilities to the partners and spell out how the profits from the company will be distributed to them. The percentage ownership should be included as well because some partners may contribute more to the partnership to get it off the ground. The document should also explain the procedure for admitting new partners and how a partner’s exit will be handled.
A partnership agreement explains the pass-through tax benefits common to a partnership and also describes how the partners are shielded from liability. A Virginia lawyer could provide or review a company’s partnership agreement to ensure it meets all the owners’ expectations.
Under the Virginia Uniform Partnership Act § 50-73.81, some actions are not permitted in a partnership agreement. These documents may not:
Because Virginia law is specific and complex when dealing with partnerships, an entrepreneur should rely on a well-practiced attorney to formalize their partnership agreement.
Partnerships can be the perfect vehicle to run your business if you have found like-minded investors and you want simplicity in reporting to the state. An essential component of your future venture should be to adopt a partnership agreement in writing so that future misunderstandings are addressed beforehand.
At Sparks Law, we are here for you and your business goals. A Virginia partnership agreements lawyer can set you on the path for success by providing the formation documents you need, so give us a call today for a consultation.