What legal advice can I receive regarding forming a partnership agreement with another business?
By
When forming a partnership agreement with another business, it is important to seek legal advice from an experienced attorney in order to ensure that the contract accurately reflects the intentions of both parties. Generally speaking, all partnerships contain certain essential elements including:
1) A mutual agreement between two or more persons or entities to enter into a joint venture and share profits and losses;
2) Contributions of capital by each partner;
3) Equal sharing of profits and losses among partners;
4) An allocation of management duties among partners;
5) The right for partners to transfer their interest in the partnership (including conditions under which they can do so); and
6) Dispute resolution procedures.
In addition, depending on the formality desired by both parties, other provisions may be added such as restrictions on competitors entering into similar businesses during or after termination of the agreement. It is also possible for one party to contribute only labor rather than capital as part of their contribution. Depending on local law, limited liability protection may also be available if formed properly. Finally, there should always be a written document detailing all terms agreed upon by both parties prior to executing any potential transaction or action involving money or assets owned jointly. This should serve as evidence that both parties are aware of their rights and responsibilities within the relationship before engaging in them.
It is worth noting that because partnerships are not typically regulated by state statutes, many times default rules will govern how courts interpret them when disputes arise unless otherwise provided for in a validly executed contract signed between all relevant parties at formation (e.g., UPA §20). Furthermore, while oral agreements are sometimes legally enforceable depending upon applicable laws/court precedent at time dispute arises (e.g., common-law fraud cases), they have historically proven considerably more difficult to prove without written documentation compared with those evidenced through execution/notarization of contracts which provide more reliable proof regarding intent behind transactions/agreements made due process afforded via legal formalities associated thereto (e
