Business Partnership Attorney
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Many entrepreneurs considering creating a business decide to form a business partnership. There are many advantages to forming a partnership for a business venture. However, it’s also important to carefully consider all the legal implications of such a business formation before entering into one. That’s why prospective businesses should consult with a lawyer familiar with the rules and regulations associated with this method of business organization.
Our attorneys at Eller Tonnsen Bach, LLC have extensive experience dealing with businesses throughout South Carolina and North Carolina. We can advise you on various legal issues often associated with business partnerships, including forming a partnership, adding a partner or dissolving a partnership. Whatever your business litigation needs, you can count on our law firm to help you navigate through any challenge.
What is a business partnership?
A business partnership is a particular type of business structure. In general, there are four different types of business partnerships. The four most common types of partnerships are:
- General partnership – The most common type of partnership, this arrangement involves two or more partners managing the company’s operations. General partners share responsibility for debts, liabilities and other financial obligations.
- Limited partnership – A more complicated type of partnership, this arrangement classifies partners simply as investors. As a result, they are not subject to liability and do not control the company.
- Limited liability partnership (LLP) – This type of partnership is similar to a general partnership and is common among doctors, lawyers and other professionals. That’s because the partners manage the company and are responsible for any outstanding debts. However, an LLP also places restrictions on the partners, who are also not responsible for financial errors made by other partners.
- Limited liability limited partnership (LLLP) – This type of partnership is only allowed in certain states (including North Carolina) and is similar to an LLP. The main difference is only one partner often oversees the business. An LLLP business structure also provides liability protection for the company’s partners.
There are distinct advantages and disadvantages for each type of partnership. Depending on the nature of your business and your company’s goals, one type of partnership might be better suited for your business. In addition, it’s important for all the partners in the company to be fully aware of the tax implications of the different types of partnerships. A business savvy attorney can explain the pros and cons of each type of business and which one makes the most sense for your particular business venture.
What is required to form a business partnership?
Forming a business partnership can be a complex legal process. First and foremost, it’s important that all of the prospective partners have similar goals and expectations for the business. Voting rights for each partner should also be clearly defined and spelled out in writing. Otherwise, there could be disputes in the future that could threaten the existence of the partnership.
Once all the partners agree on a business model, the company will need to register its name with the appropriate local, state or federal agency. Partnerships also need to obtain an Employer Identification Number (EIN) from the Internal Revenue Service (IRS). It is free to do so, however your business will need to submit a completed Form SS-4 with the IRS.
In addition, many businesses often need to obtain licenses or other regulatory approvals. Different types of businesses and industries may also have additional requirements. That’s why it’s critical to consult with an experienced attorney who can guide you through the application process every step of the way.
What legal issues often involve these types of businesses?
Many legal issues often come up involving business partnerships, including:
- Disagreements over the roles and responsibilities of different partners.
- Complaints about one partner doing significantly more work than other partners.
- Disputes over how profits are distributed to different partners.
- One partner wanting to sell their share of the business without a clear exit strategy outlined in the partnership’s buy-sell provisions.
- Partners wishing to remove one of the partners without a clear expulsion provision in the partnership agreement.
- Legal action taken against the business by one of the partners or another business.
- One partner leaving the company to form a competing business in violation of a non-compete agreement.
Knowing what to do in such situations can be confusing. Even knowing what your rights are as a business or an individual might not be clear. In such cases, an experienced attorney can advise you on the best course of action for resolving such legal disputes.
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Business partnership agreements can help prevent possible disputes in the future. That’s why it’s critical that all the partners take the time to clearly decide how to structure their company in order to avoid any disagreements.
Our law firm can advise you on the different approaches your company may want to take when creating a new business. We also regularly work with existing businesses of all sizes dealing with complex business disputes between partners or outside forces.
With our legal team on your side, you can take aggressive legal action and make sure your best interests receive the attention and focus they rightfully deserve. Contact us and learn more about your legal options. Schedule an appointment with an attorney at one of our three office locations in South Carolina and North Carolina.