Do I Need a Lawyer When Forming a Business Partnership?
Forming a business partnership can be straightforward. A partnership is an agreement between two or more people to run a business for profit. While the agreement does not have to be in writing to be valid, skipping a written agreement can cause complications and legal problems if disputes arise. Consulting a business law attorney when forming a partnership ensures your rights and interests are protected. Consider the following aspects before forming a partnership.
Management and Control
When forming a partnership, decide how much management and control each partner will have. For example, if the business signs a contract, does one partner have authority to bind the partnership, or must all partners approve it? Clearly defining each partner’s role helps prevent confusion and conflicts.
Assets and Liabilities of the Partnership
Partners usually contribute assets to start the business. Sometimes, partners may need to loan or fund the business with personal assets if the business encounters difficulties. Documenting each partner’s investment and the terms for repayment from business profits is a smart business practice.
Dissolution of the Partnership
Many partners do not plan for what happens if the partnership dissolves. Depending on the reason for dissolution, dividing debts and assets can become complicated. Addressing dissolution upfront clarifies each partner’s rights and responsibilities.
Consult a Business Law Attorney
Even though forming a partnership can be simple, having a written agreement helps define responsibilities and rights clearly. Without it, default partnership laws may apply in disputes, which could be unfavorable. If you plan to form a business, consult an experienced business law attorney.
For more information about forming a business partnership in California, contact the business law attorneys at Van Egmond & Heitlinger, APC at (209) 876-8886 or contact us here.