"The Small Business Law Firm^SM"

What does it take to form a partnership?
Very little.  Two people can call themselves "partners", and they're in business.  If the last names of the partners are in the partnership name, no fictitious business name is even required!

The question should read "What does it take to properly form a partnership so that my interests are protected?"  This requires a formal, written agreement that clearly spells out the complete terms of the partnership.  Don't rely on those "fill in the blank" agreements from the stationery store -- only a licensed attorney can ask the right questions to be sure you get the proper agreement for your business.

Is a general partnership better than a corporation or limited liability company?
An ordinary or "general" partnership is easier to form, but unfortunately offers no liability protection.  If a partnership is sued, your personal assets can be used to satisfy any judgment.  Not a pretty picture!  The best bet is to sit down with us so we can best determine your business' structural needs.

Is a limited partnership the answer?
A limited partnership must be formally established with the office of the Secretary of State (just like a corporation or LLC).  It does provide liability protection for the limited partners, but not for the general partners.  The problem is that limited partners are prohibited from managing the day to day affairs of the partnership.  If they do, they expose themselves to the same liability as a general partner.

My current partner is taking too high of a salary.  What can I do?
What does your current partnership agreement say?  Absent an express agreement, partners can not take any salary for their services -- they must take profits from the partnership.  Unless the agreement says otherwise, all partners are entitled to an equal share of the partnership profits.  They are also entitled to an equal voice in how the partnership is run.  This is why a written agreement is so important.

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