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PARTNERSHIP AGREEMENT

PARTNERSHIP AGREEMENTS IN CALIFORNA

General Partnerships have the advantage of being relatively easy to form. No state filings or fees are required. All that is needed is a partnership agreement that is signed by all the partners. You must have at least two people to form a partnership. There is no such thing as a one partner partnership! The primary disadvantage of partnerships is that there is NO limited liability. Each partner is personally liable for the debts of the partnership, i.e. the partners’ personal assets are not shielded from creditors and law suits. Some protection can be provided by insurance but the partners will still be liable for debts and liabilities not covered by the insurance. Similar to a LLC, a partnership doesn’t pay taxes directly. The partnership issues K-1’s to each partner at the end of each year and the partners pay taxes through their own personal tax returns.

We can help you decide if a general partnership is the right organizational structure for your business and handle the required document preparation. If you already have a partnership agreement and want to amend it or to consider converting to another business structure we can assist you. Call Terry L. Thompson at: (925) 855-1507

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