A partnership is a business entity that acts like a sole proprietorship but with partners who share the business’ profits and debts. There are general partnerships, limited partnerships, and limited liability partnerships.
If you have a business in Orlando or in the counties of Orange, Seminole, Osceola, Hillsborough, Pinellas, Volusia, Polk, and Alachua, you could form a general partnership where you and your partners share equal rights and responsibilities in operating the company but assume full personal liability for any debts. The agreement can also establish which partner has authority to make decisions and how the profits are distributed.
One partner, though, can enter into a contract that binds all the partners. Any profits pass to the owners and each pay income taxes at whatever is their individual tax rate. Each partner is permitted to offset taxable income from other sources if there are partnership losses, called “pass-through” losses.
This type of partnership has at least one general partner and one or more limited partners. The general partners assume personal responsibility for the debts and obligations of the business and have exclusive control of the management of the business.
Limited partners do little and do not participate in managing the business but their exposure to risk is limited to whatever they invested. They and the general partners share in the profits and losses and can also offset taxable income from other sources if there are losses.
Limited Liability Partnerships (LLP)
In Florida, an LLP is a state registered partnership usually formed by those practicing professional services, such as those procativing law, public accounting, or architecture. It is a business arrangement whereby some or all the partners have limited liability, meaning that the partners may not be liable for another partner’s misconduct or poor business practices.
Like a general partnership, one partner can enter into and commit all partners to obligations under a contract regardless if they consent or not. All property and funds are owned by the partnership as well. The partners can establish how the firm is managed.
Partnerships can be complicated. If you are forming a partnership or are encountering legal problems in one, consult the partnership attorneys from the Morey Law Firm, P.A.
Our lawyers are skilled and knowledgeable in all facets of partnership law and can properly advise you on all your partnership issues and needs. Contact the Morey Law Firm, P.A. today at 407-426-7222.