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Maybe you're just getting ready to start your small business. Or maybe you've been plugging along for a couple years and are finally ready to take your operations big time. Or, you're unhappy with the current legal structure of your business and are looking for an alternative.
Either way, you may be considering forming a partnership. But you should know that partnerships, as all corporate structures, come with legal complications. Here are five legal issues that business partnerships may run into.
Partnerships aren't for every business, and before you decide whether it's right for your business there are some things to take into consideration. While partnerships may be easy to create and end, there may be some hard choices to make when it comes to partners' duty of loyalty to each other.
If you are starting a partnership, you'll need a partnership agreement. And any good partnership agreement will need explicit clauses delineating capital contributions, partner duties, and partner shares of profits and losses, as a start.
One of the biggest legal issues in a partnership is limiting liability among the partners. Can one partner saddle the entire business with debt or a poorly negotiated business contract or agreement? Find out how you can protect yourself against a bad partner.
Before you even begin your partnership, you'll want to have an exit strategy. There are ways for small business, and even partners, to survive the end of a partnership in better shape than when they started.
Partnerships are relatively easy to form, but that doesn't mean they're always easy to maintain and manage. So while you could form a partnership without an attorney's expertise, why not make sure your partnership is set up to succeed from day one? Contact a business organizations attorney today.