San Diego Business Lawyer and Contracts Attorney providing a first class “one stop shop” for all your business, contract, will, tax and estate planning legal needs. Contact us today: (619) 400-4942.
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Phone: (619) 400-4942
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A partnership is an association of two or more persons to carry on a business for profit as co-owners. While specialized partnership forms have been recognized, the two basic choices are the general partnership and limited partnership. A general partnership may (but should not) be created by oral agreement, and creation of a general partnership does not require the intervention of any public agency. In contrast, a limited partnership, which has two classes of partners (i.e., “general” and “limited”), can only be created by appropriate registration with the Secretary of State.
1. GENERAL PARTNERSHIPS
General partnerships originated under the common law and consist of two or more partners, referred to as general partners, each of whom is generally actively involved in the business. Formation of a general partnership does not require the completion of any statutory formalities; it simply requires the agreement of the parties, which can be inferred from their conduct as well as from any oral or written contract. Like proprietors, general partners are subject to unlimited personal liability for the obligations of the partnership. Unless limited by agreement, each general partner is entitled to participate fully in the management of the partnership business, and general partners stand in a fiduciary relationship to one another. New general partners cannot be admitted to a partnership without the consent of the other partners, and the death, withdrawal, or retirement of any general partner will cause dissolution of the partnership, although the partners may provide by contract to continue the partnership upon the occurrence of such an event.
2. LIMITED PARTNERSHIPS
In contrast to general partnerships, limited partnerships are a creation of statute and must therefore be organized under the statutory provisions imposed by the various states. In most cases, organization of a limited partnership requires the completion of strict statutory formalities including, in most jurisdictions, the execution and filing of a certificate of limited partnership with the appropriate state authorities. A limited partnership consists of one or more general partners and one or more non-general partners, referred to as limited partners. General partners of a limited partnership have the same rights of control and exposure to liability as general partners of a general partnership. On the other hand, limited partners are passive investors who contribute cash and other assets to the partnership for use by the general partners in the conduct of the business. Limited partners have few rights to exercise any degree of control over the partnership business. In turn, the liability of the limited partners is restricted to their investment in the business. The interest of a limited partner is freely transferable, and the death, withdrawal, or retirement of a limited partner has no effect upon the operation of the partnership business.
San Diego Business Lawyer and Contracts Attorney providing a first class “one stop shop” for all your business, contract, will, tax and estate planning legal needs. Contact us today: (619) 400-4942.
Contact Kehr Law today
Phone: (619) 400-4942
Text Message: (619) 823-8230
Email: dan@kehrlaw.com
Tags: Business, General Partnerships, Kehr, Kehr Law, Law, Lawyer, Limited Partnerships, Partnerships, San Diego, San Diego Business Attorney, San Diego Business Lawyer
