Partnership Agreements Review
When you and another person, or more, decide to start a company you can create a business partnership. A Partnership is one of the most popular types of business formations in America.
Types of Partnerships
When two or more decide to launch a company a partnership is created, with or without a written contract. Be aware, that most business experts and attorneys recommend that you put your agreement into writing so that both parties are clear on their roles and responsibilities. Many disagreements can be avoided by taking the time for this important step.
General partnerships distribute the profits and liabilities to each individual. There are no protections against personal liability for business debts in this type of business formation. To safeguard your personal assets, credit, property and retirement funds I recommend forming an LLC or S-Corp.
If you want to bring in investors to your business a limited partnership may be good for you. The investors in your business are personally shielded from your business liabilities and debt. Additionally, you decide who are the general partners and manage the firm.
Legalzoom offers three different packages starting at $149 to $379
All the packages include:
- Checking availability of your LP Limited Partnership name
- Completion and filing of Certificate of Limited Partnership in your state
- Legalzoom Peace of Mind Review
- Partnership Certificates
The Standard and Express Gold packages expand the offerings to also include:
- Personalized partnership certificates
- Transfer Ledger
- Deluxe Limited Partnership Kit embossed with your company name
- Official partnership seal
- Rush service – 7 days
- Federal Tax ID Number (EIN) discounts
- Two day delivery of final partnership package
Advantages of Limited Partnership
- Investors can contribute capital while general partners manage and run the business
- Protection for partners and investors from most liabilities
- No dissolution of partnership if a limited partner leaves the partnership
LLP Limited Liability Partnership
An LLP is for the business owner who does not want to be responsible for any of the business liability. In this type of business formation, all of the partners in the LLP are protected from any debts or court judgments that the business incurs.
However, only certain types of industries and professions can benefit from this type of partnership, such as attorney and physicians.
While Limited Liability Partnerships protect the partners from the business liabilities it does not shield the individual partner from any legal action due to their own negligence. But the other partners in the LLP are not responsible for the negligent actions of a single partner.
If you are considering starting your own business and forming a partnership, consider using Legalzoom for their expertise and value. You will be glad you did.
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Check out my guide on how to start your business right with tons of useful tips I learned by successfully starting, building, and selling multiple companies.