Legal Question in Business Law in California

Re: Business Partnership?

To form a business partnership one COULD just start the business. This can lead to problems down the road, so the smart way is to have a partnership agreement that spells out certain issues such as repayment of debt, division of profits, and any other issues that you think may come up plus the ideas of a qualified attorney.

Another thing you may wish to consider is, is it a partnership you want, or a corporation or LLC. There are many decisions that can be made now that can save headaches later.

Joel Selik

Attorney at Law

Ll.M-Taxation

www.4thelaw.com

800-894-2889

Re: Business Partnership?

When two or more parties act together to pursue an activity for profit, with an understanding that the profits will be shared, a partnership is created, whether or not the understandings are formalized in writing, made orally, or never expressed at all, but demonstrated through acting together as partners.

The RIGHT way to form a partnership is to think through, negotiate, then reduce to writing all of the terms and conditions of the working relationship.

Keeping in mind that ALL partners are responsible to outsiders for ALL partnership debts (at least in general), you should seriously consider getting personal legal advice. If you don't follow this recommendation, at least get a self-help partnership book (there are several), read it carefully from cover to cover, then use the terms proposed in the book, modifying them within the suggested parameters to fit your business. All partners should participate in drafting the agreement, read the final version, agree and sign.

Re: Business Partnership?

You may not want to hear this, but see a lawyer. You need to find out which type of entity will work best for you, and protect your interests/assets best. It's also relatively inexpensive. If you're against seeing a lawyer, check the California-specific business formation books in the library.