Business partnerships offer a wealth of advantages, combining the talents and resources of two or more individuals. But they are not without risks and largely for the same reasons. It’s one thing to operate a business enterprise on your own, with nobody else to get in the way. It’s a different ballgame when two or more people with their own motivations and interests go into business together.
Before you sign that partnership agreement, let the New York business lawyers of Rosenbaum & Taylor advise you.
The Basics of New York Business Partnerships
A partnership is an agreement between two or more people to do business together. By signing a business partnership agreement, the parties agree to work together to advance their mutual interests. Four types of partnership exist:
- Limited Liability Company (LLC) Partnership
- Limited Liability Partnership (LLP)
- Limited Partnership (LP)
- General Partnership (GP)
Before deciding which of these is best for your partnership, talk to a New York business law attorney. You also need to make sure, as a general matter, you and your partners are on the same page. Are you compatible enough to do business together? Do your interests align or at least not conflict?
The Concerns You Will Need to Address
Assuming you pair well, these are some specific things to consider before entering the partnership.
Do You Have an Exit Plan?
It may seem odd to ask this at the start of a partnership. However, many agreements crumble without exit strategies ever being adopted. This can leave a partner at a significant disadvantage, financially and legally. Make sure a clear plan is written down that specifies when and how a partner may leave the partnership.
Who Will Contribute What to the Partnership?
A partnership works because different members bring different things to the table. But it needs to be clear who will bring what. Specify the expectations of each partner’s investment into the enterprise. Outline the respective duties of each partner as the business develops and grows.
How Will Profits Be Distributed?
Your New York business lawyer will also recommend deciding how profits from the partnership will be shared. It needs to be clear what each partner will receive and when.
Who Is in Charge of What?
This next topic concerns both the long-term and day-to-day management of the partnership. Who makes sure that bills are paid and emails are answered? Who gets to decide business strategy, purchases, and contracting? There are any number of management issues that may arise. The question of who handles them should be settled among all partners.
Which Type of Legal Partnership Is Best?
As mentioned above, there are several different legal structures your partnership could adopt. The differences affect taxes, liability, and numerous other matters. An experienced New York business law attorney will advise you on the best structure for your organization.
Sound Counsel for All Your New York Business Legal Needs
You will likely have many other concerns, depending on the nature of your partnership. Regardless of the legal needs of your business, you have a trusted ally in Rosenbaum & Taylor. Find out today why so many partnerships trust our New York business attorneys. Give us a call today to schedule your initial consultation.