A Florida Partnership Agreement
Congratulations! It is always exciting to be standing at the beginning of a new venture. Doing it with a partner can make the journey so much more rewarding – not only financially, but also personally in terms of friendship and biting the bullet together. You should strongly consider a Florida Partnership Agreement; however, you don’t need an attorney to help you with the paperwork. A business legal document preparer such as South Florida Legal Doc Prep Services, LLC can help you with this while saving you money and give you peace of mind!
What is a Florida Partnership?
When two (or more) people agree to form a business together for profit, they form a partnership. There is no formal registration needed at the start of a new undertaking, although a partnership must comply with all of the rules of standard business enterprises, once up and running. Chapter 620 of Florida State law sets out all the rights and obligations under law when forming a new partnership. There are different types of alliances – each with its paperwork, fees, and ongoing maintenance.
Do the Normal Things
To form a general partnership in Florida is easy. Choose the name of your new business and file the trade name if necessary. Obtain an employer identification number if you plan to hire staff. Permits, applicable license, and zoning clearances might also be needed. But, maybe the most important thing to do is to draft and sign a partnership agreement.
Why is a Partnership Agreement Important?
It is Not Mandatory
A formal, written partnership agreement is not necessary for establishing a partnership. In fact, there is no requirement from any public institution to file such a document.
So Why Must We Sign It?
For a moment, imagine this scenario:
You and your partner developed a creative solution to an age-old problem in your city. It is a hit, and very soon, the contracts are coming in, you have a healthy bank balance, and life couldn’t be rosier. You did not sign any form of agreement between the two of you. One day, your partner tells you that he should get more of the profits as the original idea of the business was actually his. It might be accurate, but you have worked just as hard to get the business up and running and into a profit. What do you do? Without a partnership agreement, you might have a problem.
An Essential Step
Herein lays the necessity of such an agreement:
It is a crucial step to ensure that there are no future misunderstandings between you and a partner. A well-drafted partnership agreement will stipulate the rights and responsibilities of each partner. In effect, you will decide in advance how to handle certain situations while you are partners. It is an agreement that protects each person’s interests.
What Should a Partnership Agreement Cover?
A list of possible items to think about might be:
- What each partner brings to the table in terms of capital or service
- What are the duties of each partner, and how are they going to manage the company
- Are you both going to work full-time
- The allocation of profits (and losses)
- The tax liabilities of each partner
- Rules for decision-making and how to resolve disputes
- What if a new partner wants to join? Or you or your partner wants to leave the partnership
- What happens in the case of bankruptcy, or if one of the partners dies
- How to dissolve the company, if needed
A partnership agreement is not carved in stone. If circumstances change, it is possible to amend any agreement. The important thing is to have something in writing that shows your original intent.
You Can Choose Not to Have a Partnership Agreement
There is a Downside
The obvious downside is that you and your partner will be doing business in the dark. It may be confusing when unforeseen situations arise. Also, without a partnership agreement, aspects of your relationship with your partner will be determined by state law that might be difficult to understand. Solutions to problems also might not be what you’d expect.
Feel a Headache Coming On?
Preparing a partnership agreement can be complicated. South Florida Legal Doc Prep Services, LLC can help you create the agreement you need. We will talk you through all of the important issues and help you write a partnership agreement tailored to your needs. Wouldn’t you rather have peace of mind and have everything in writing?
Need a Website?
While you are allowing us to get your partnership agreement in place, you may want to think about a new website as well. How else are you going to gain exposure and obtain new business? For a new startup or even an existing business, the perfect online solution is a professional website that is in line with your brand. Hire a Florida small business Professional Website Designer who will work alongside your business effortlessly. They have your needs covered as far as helping to customize your website no matter the size of your business. They can design your company logo, website, branding, business cards, stationary, flyers, brochures, print design, booklets, whatever your needs may be.
This blog does not constitute legal advice and does not establish an attorney-client relationship.
If you need legal advice, please contact a lawyer directly.