Legal Question in Business Law in New York

Re: Partnership Agreement in Corporation

The issue is CHOICE of BUSINESS ENTITY.

The phrase BUSINESS ENTITY refers to the fact that both New York state law and federal law treat businesses differently depending upon whether they are partnerships OR corporations (OR sole proprietorships, etc.) The choice of corporation as opposed to partnership has implications for taxation of the busisnes and f its owners, and for the personal liablity of the business owners in the event of lawsuit against the company.

Upon formation of the business, you have an EITHER/OR choice on type of business entity: the business generally cannot simultaneously operate as different types of business entity. If you decide to run the CORPORATION, then you file one set of forms with the NYS Department of State; and, if you decide to operate the business as a partnership then you file a completely different set of forms with the NYS Deparetment of State; (and, you may also want to look into the alternative of forming the business as a LIMITED LIABILITY COMPANY, in which case yet another totally different set of forms is filed with NYS Department of State).

Each of these choices of business entities carries with it different TYPEs of obligations and rights for the business owenrs, and therefore are subject to different types of agreements: therefore, if you for the business as a corporation, you will need a SHAREHOLDERs AGREEMENT, NOT a PARTNERSHIP AGREEMENT; and, if the business is formed as partenrship, then you will want a PARTNERSHIP agreement.

There are advantages and disadvatages for each choice of business entity as compared to the others: in addition to consulting with any of the other attorneys responding to your question, there may be helpful pamphlets, brochures and manuals to guide and educate non-lawyers n the comaprative advantages and disadvantges between corporations, partnerships, and limited liability companies, available in this website,

the LawGuru bookstore; I know that such literature is available on the Nolo Press website, although I am not sure whether they have material specifically applicable to New York state law on this subject.

Re: Partnership Agreement in Corporation

Yes you can. It is quite common for two partie to create a Partnership Agreement prior to forming a corporation with the intent on incorporating to pursue their business interests. What it does is establishes a guideline in which you will proceed when forming your corporation.

Feel free to contact my office for further assistance with creating your Partnership Agreement and forming your business structure.

Re: Partnership Agreement in Corporation

You have a shareholders' agreement in a corporation that serves the same function as the partnership agreement in a partnership.

Be VERY, VERY CAREFUL with partnership; it has some very nasty ramifications. BE SURE YOU TALK WITH YOUR ATTORNEY BEFORE ENTERING INTO ANY PARTNERSHIP AGREEMENT WITH ANYONE!!!!!!!!!!!!! Avoiding the really and truly draconian ramifications of general partnership is absolutely worth the price of the consultation.

THE INFORMATION PRESENTED HERE IS GENERAL IN NATURE AND IS NOT INTENDED, NOR SHOULD IT BE CONSTRUED, AS LEGAL ADVICE. THIS POSTING DOES NOT CREATE ANY ATTORNEY-CLIENT RELATIONSHIP BETWEEN US. FOR SPECIFIC ADVICE ABOUT YOUR PARTICULAR SITUATION, CONSULT YOUR ATTORNEY.

Re: Partnership Agreement in Corporation

From what you describe, you need a shareholders agreement. My firm charges just $199 to prepare such an agreement for two people. In addition, you should have a lawyer set up your corporation properly to avoid problems later on. I charge just $97 plus the filing fee. A complete package which will make you 100% legal is just $599 plus the shareholders agreement. Feel free to call or email for more info.