Partnerships | Partnership Risks | Partnership Liabilities | San Jose Partnership Attorney

WHAT ARE PARTNERSHIPS?

Partnerships are the most-simplest form of structure under which two or more people conduct business. 

WHAT ARE THE FORMAL REQUIREMENTS FOR A PARTNERSHIP?

There are no formal requirements to form a partnership.  A general partnership must have two or more persons engage in a business for profit.  

WHAT IS MY LIABILITY AS A PARTNER?

All Partners in a Partnership are joint and severally liability for all Partnerships debts and liabilities. What does this mean? It means that if you will be responsible for your partner’s actions and vice-versa. Any Partnership debt such as loans, line of credit is both of your responsibility. Any lawsuits bought against the partnership are also both your responsibility.

ARE ALL PARTNERSHIPS THE SAME?

Structurally speaking all Partnerships are similar. They are formed the same way. However, some have or require more formalities than others. The most notable difference between various Partnerships are the liabilities that go along with each Partnership. Partnerships can be formed for any reason, as long as it is a venture between two or more people for Profit. It is important to discuss your Partnership and its purpose with your Lawyer. This is a very important step-understanding the risks of your Partnership. 

WHAT ARE MY PARTNERS RESPONSIBILITIES IN A PARTNERSHIP?

Each partner in a partnership owes all other partners a (A) Duty of Loyalty, (B) Duty of Equal Profit Sharing, (C) Equal control in the partnership, (D) No Salary (unless the Partners agree otherwise). 

WHAT ARE RISKS IN PARTNERSHIPS?

The greatest risk of a partnership is unlimited liability of the Partners involved-Personal liability to creditors, lawsuits and debts. 

HOW DO I LIMIT MY LIABILITY IN A PARTNERSHIP?

You can limit your Liability by becoming a Limited Partner. Limited Partners are usually passive investors in the business and do not engage in the day to day activities of the business. Limited Partnerships are complex and have formal requirements. They also have to be registered with the state. You can also choose to Incorporate your business. Incorporation provide you with many additional protections that Partnership cannot. 

WHAT ARE DIFFERENT PARTNERSHIP AGREEMENTS?

• A GENERAL PARTNERSHIP AGREEMENT 
• LIMITED PARTNERSHIP AGREEMENT
• PARTNERSHIP FORMATION AGREEMENT
• PARTNERSHIP OPERATING AGREEMENT 

You should speak with us if you have any questions or wish to get a formal agreement for your Partnership venture. 

HOW CAN A LAWYER HELP IN PARTNERSHIP?
Lawyers can help you: 

• Access your risk in the Partnership 
• Help structure the Partnership 
• Recommend alternative to Partnership arrangement if necessary
• Answer your questions 
• Prepare Contracts 
• File necessary documents with the State

Drason Law Firm provides clients with personal attention. We strive to provide all services at very competitive rates. We are located in San Jose, California. 

Drason Law Group
560 Winchester Blvd, Suite 500
San Jose, CA 95128 
Phone: 1-800-929-5140
www.DrasonLaw.com