A partnership exists when two or more persons operate a business as co-owners, and share liability as well as the income. The partners each act on behalf of each other and bind each other by their actions.
Partnership Agreements: Points to be aware of
Partnerships can be easier and less expensive than companies to establish. The administration of a partnership can be very simple, and as set out in the ‘partnership agreement’ between the partners. It can be easy to change from a partnership to a company structure.
However, all partners are personally responsible for the business debts of the partnership. This means that each partner is individually liable for debts incurred by the other partners in the partnership. This is referred to as being ‘jointly and severally’ liable. Partnerships can have a different tax rate from companies. Other partners must agree to a partner transferring his or her partnership to another person. With partnerships, personal differences can interfere with the ongoing business of the partnership.
There are a number of other structures that may be preferable to a partnership structure, such as an incorporated company or sole trader, but each set of circumstances would need to be assessed on its merit.
How we can assist
Where a partnership structure is chosen, a well-written partnership agreement can minimise or avoid potential future disputes by outlining every partner’s rights and obligations, and proper dispute resolution procedures.
Obvia Legal can help you with your partnership arrangements, whether it is putting in place a partnership agreement, or assisting you through a dispute over an existing partnership.
Fees and Charges
We understand that for many of our smaller clients cost predictability is essential. To meet that need, we’re happy to offer many of our frequently requested legal documents at a fixed price.
To suit your requirements, we offer a range of value-based pricing models, including:
- Hourly rates
- Capped fees
- Fixed prices
- Staged costing
Please contact us to find out how we can be of assistance!