A partnership is one of the most common types of business structures. According to the law, a partnership: your thoughts: consider a business partnership? Are you already in partnership? What are the pros and cons you`ve experienced? Are there any tips or advice for those considering going into business with someone else? One of the first tasks you and your partners check in your to-do list is to decide the name of your business. The company name may reflect the names of the partners or have a fictitious name. In both cases, your company`s name must be registered with your state. Assuming you have done a complete search of the name you have chosen, the registration will confirm that no other company of the same name exists and will prevent others from using your name. Each partner has its own interest in the success of the company. Given this personal interest, it is generally accepted that each partner has the authority to make decisions and enter into agreements on behalf of the company. If this is not the case for your company, the partnership agreement should define the rules specific to the authority given to each partner and how business decisions are made. To avoid confusion and protect everyone`s interest, you need to discuss, determine and document how business decisions are made. “Partnership agreements need to be well developed for many reasons,” says Laurie Tannous, owner of the law firm Tannous Associates Inc. “It is important that partners` wishes and expectations change and vary over time. A well-written partnership agreement can meet these expectations and give each partner a clear map or plan for the future.
In most cases, partner contributions (time, resources and capital) to the company vary from partnership to partnership. While some partners provide seed funding, others may provide operational or management know-how. In both cases, specific contributions should be indicated in the written agreement. Each state (with the exception of Louisiana) has its own partnership laws, which are commonly referred to as the “Uniform Partnership Act” or the Revised Uniform Partnership Act – or sometimes the UPA or the Revised UPA. These statutes define the basic legal rules for partnerships that control many aspects of the life of your partnership, unless you establish other rules in a written partnership contract. Partnership contracts are a necessary contract for any professional partnership. They contribute to the financial protection of all partners and can mitigate potential tensions throughout the duration of the business.