Partnership Lawyer in San Antonio
If you and a business partner are considering starting a partnership, it is important you consult a business lawyer to ensure you know the types of partnerships available to you and the implications each may have on your business. The specific type of partnership you choose will depend upon the business goals of you and your partners.
The attorneys at Estorga Johnson Law Firm PLLC can help small business owners throughout Texas, including Central Texas, South Texas, the Texas Hill Country, San Antonio/Bexar County, Seguin/Guadalupe County, Kerrville/Kerr County, Bandera/Bandera County, New Braunfels/Comal County, and Boerne/Kendall County determine which business entity is best for them.
A partnership has two or more owners who share in the profits and losses of a business. A general partnership is the most basic form of a partnership. Forming a general partnership requires a minimal number of forms to be filed, but does require a signed partnership agreement. Some requirements and qualities of a general partnership include:
- Partnership Agreement: A general partnership requires a partnership agreement signed by all of the partners. It is important to consult a small business attorney about drafting a partnership agreement for you.
- Ability to Bind Partnership: Generally, all partners have the ability to bind the business to contracts, debts, and other obligations.
- Liability: Generally, all partners are jointly and severally liable and personally liable for the debts and liabilities of the business.
- Duties: Partners in a general partnership have fiduciary duties towards one another.
Limited Partnership (LP)
A limited partnership is one in which there is a general partner who is in charge of running the business and limited partners who invest in the business. A limited partnership differs in many ways from a general partnership. The primary distinction is that limited partners in a limited partnership have limited liability protection. Some other qualities unique to a limited partnership include:
- Business Entity: Unlike a general partnership, an LP requires formal creation of a business entity through the filing of a Certificate of Formation with the Texas Secretary of State.
- Liability Protection: While the limited partners in an LP have limited liability protection, the general partner is responsible for all debts and liabilities of the business.
- Business Control: In an LP the general partner has control over the management of the business while the limited partners are investors.
- Allocation of Profits: Unlike a general partnership, profits in an LP are generally not split evenly, but rather in a manner equivalent with the value or percentage of capital contribution from each limited partner.
Limited Liability Partnership (LLP)
A limited liability partnership, in Texas, is an entity in which all of the partners, whether general partners or limited partners, have liability protection. Either a general partnership or a limited partnership can apply with the State to become a limited liability partnership. Limited partnerships that become limited liability partnerships are also referred to as limited liability limited partnerships (LLLPs). If you are looking to start a partnership, it is important to consult a small business lawyer to determine which type of partnership may be best for you.
If you are thinking about starting a new business or need a lawyer to help with your existing business contact us today.