General Partnership in Florida
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We are your Florida Partnership Attorneys.
Our Florida business lawyers serve clients who are starting their business in Florida in Palm Beach County, Broward County, Miami Dade County, and most other Florida cities and counties.
What is a General Partnership?
A partnership is an easy type of business to form as there is no state filing requirement. However, this structure does not offer any personal liability protection.
A Partnership is formed when two or more people begin and conduct a business as themselves, or under an assumed name. Whether your group means to start a business or not, if you transact business in the state of Florida, with a partner, knowingly without registration, your business will likely be legally classified as a partnership.
A written Partnership Agreement that lays out each partner’s rights and responsibilities is not required, but is highly recommended as a lack of agreement, or an oral partnership agreement, may cause significant dispute between the partners in the future.
Partnership Agreements detail the responsibilities of the partners and how the profits and losses are allocated, along with many other important clauses.
In a partnership there is no legal difference between the owners and the business. Thus, the owners are personally accountable for all debts, losses and legal responsibilities of the business including being personally susceptible to suit for damages caused by the business. This means that all of an owners personal assets can be encumbered, frozen, seized or sold as the sole proprietorship structure offers no protection from liability.
Further, the partners are joint and severally liable to the partnership debts and liabilities. This could mean that you do nothing wrong, but your partner causes a loss, that you will share, and your personal assets are at risk.
This may lead you to ask, “What are the benefits of starting a partnership in Florida?” The easiest answer to that question is simplicity and cost.
Taxation in a Partnership
Tax simplicity occurs because a partnership is what is known as a “Pass Through Entity.” The owners simply claim and pay the usual personal income taxes on any income generated from the business.
Registration simplicity, the paperwork and formalities are very minimal compared to forming most other entities, so this may be appealing from a cost, speed, and ease perspective.
However, although some of those advantages may sound appealing, the susceptibility to personal liability leaves a partnership a very poor option in Florida.
We understand the challenge of properly structuring a business because like you, we’re business people.
We also happen to be Florida Transactional and Business Law Attorneys.
A critical step in launching your business is choosing the right business structure.
We can help. Call us, we want to hear your story and share our experience.
By carefully choosing the right business structure, you can limit your personal liability, take advantage of tax opportunities, and rest easy knowing that your company has set forth clear instructions on acceptable and efficient operation.
Our Florida business attorneys can help you choose the right business entity by listening to your concerns. We will also raise necessary considerations that you may not have considered. Most importantly, we will relieve the burden of organizing, drafting, and filing the proper documents with the state.
Our Florida business lawyers can help you choose the right business entity. We work in Palm Beach, Broward, Miami Dade County and throughout Florida.