Partnership Agreements

A partnership is a business formed with two or more people wherein each person (partner) contributes assets to the business and shares in the profits and losses of that business.

There are typically 2 types of partners:

(1)    General Partner – These partners are active in the day-to-day operations of the business, do work for the company (such as a baker, chef, or barber) but General Partners also participate in the management and decision-making for the Partnership.  Sometimes a General Partner will also take on the additional duties of managing the partnership business and would then be referred to as a Managing Partner.

(2)    Limited Partner – These partners are passive and although they have invested in the business, they do not participate in the day-to-day operations of the business or do work for the company.

The most important document for any partnership is the Partnership Agreement.  A Partnership Agreement is similar to Corporate Bylaws and Operating Agreements in that it outlines and defines the purpose, policies, duties, and responsibilities for the individual partners.  It would also typically address all terms and conditions that have been agreed to by the partners.

Any partnership that is formed on a handshake without a Partnership Agreement in place is at risk if something happens to one of the partners and/or should a disagreement arise between the partners.

If you are forming a partnership, then please call Brian M. Rokaw, P.A. to schedule a free no obligation consultation – (305) 722-5888.

See also; Corporate Bylaws and Operating Agreements