Legal Question in Business Law in New York

Two people signed a "partnership agreement". Let's say the agreement says "The Partners will do business as a partnership under the name of A B Partners". A day later, a LLC is formed with the same members and named "A B Partners, LLC".

The partnership agreement only ever references "partners" and "the partnership", it never mentions "company" or "LLC". Except maybe hinting in one line: "Admission of a new partner shall not cause the dissolution of the underlying partnership business, which will be continued by the new partnership entity"

However, the partnership agreement outlines operations, divides interest, and how to divide the profit of the "partnership". and there is no separate "LLC operating agreement".

So then, is the "partnership" and the "LLC" the same entity or completely Separate? Can the partners own different shares of interest in each of those entities? Does the dissolution of one entity imply the dissolution of the other?


Asked on 11/14/12, 4:50 pm

1 Answer from Attorneys
Walter LeVine Walter D. LeVine, Esq.

I have not seen the "partnership agreement", so I cannot comment specifically regarding it. In general, however, a partnership comprised of two or more people, does need some entity to operate and these days the simplest form is a LLC. In most instances the use of a LLC has great advantages; most notably, limited liability, that might not be available if the partnership operated using some other format - of which there could be several. The partnership relationship is covered by the agreement between the partners, and controls the operation of the partnership business which is operated through the LLC. Thus, one is considered the equivalent of the alter ego of the other. I suggest having a business attorney review the "agreement" and revise it so it covers the LLC. There are many more things that the agreement should cover, such as withdrawal of a partner, termination of the business, death or disability of a partner, are just a few items to consider.

This is a response to an Internet question and the reply is set forth for information purposes only and is not intended to be legal advice or as creating an attorney-client relationship.

Read more
Answered on 11/14/12, 7:58 pm


Related Questions & Answers

More Business Law questions and answers in New York