Crafting A Florida Business Partnership
A partnership is one of the most common and enduring methods of structuring a Florida business. There are pros and cons to choosing this option, but the cons can be minimized by properly crafting the partnership itself, and ensuring that both potential profits and loss are handled equally. A knowledgeable attorney can help you create the partnership that will best serve your business and protect both partners’ interests.
Two Types Of Partnerships
A partnership can be general or limited, and the pros and cons will differ from business to business. General partnerships tend to be the most straightforward – there is very little structure, with each partner being personally liable for all of the debts incurred by the business. This does mean, however, that the partnership does not pay taxes on any income; rather, the partners do. Failure to do so can lead to significant consequences both personally and professionally.
A limited partnership is similar, but also adds the possibility of having both general and limited partners within the same company. General partners are fully involved in the day-to-day running of the company, while the limited partners take more of a backseat role. The trade-off, as one might imagine, is that limited partners have little to no personal liability, while general partners do. Limited partnerships are perhaps less common than they used to be, but it still may be a viable option for your business.
Have A Written Partnership Agreement
One of the first things you should know once you have decided the form your business will take is that while Florida does not strictly require a written partnership agreement, it is highly recommended that you have one. It can preempt costly litigation if you disagree or diverge in the future. If you choose not to have a written partnership agreement, you must still maintain what is known as a repository of critical information, which includes a host of documents, including tax returns, personal information for partners, and any information regarding past conversions or mergers.
If you do opt for a written partnership agreement, it should contain provisions for all the major potential future events that might occur – for example, plans for dissolution, merger, or sale of shares. While obviously, no one can plan for every possible eventuality, it is recommended to try to create a plan for the most common. It should also contain agreements related to sharing profit and loss, as well as a decision on the nature of the partnership itself.
Contact A Seminole, FL Business Law Attorney
Getting a business off the ground is difficult; doing so while not having a clear structure to your company is even more so. A Florida business law attorney from the Hunt Law Group can help you ensure that your business is sound while your rights are protected. Contact our office today to schedule a consultation.