Articles Tagged with partnerships

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change-300x200Many of the world’s most successful businesses began as garage-based partnerships. A family selling grandma’s cakes from its home in 2010 may have a national following by 2015. Unless you’re already a national corporation, most California-based businesses begin as partnerships or sole proprietorship’s.

There’s a purpose behind every business entity offered by the State of California. Partnerships can be limited, as they often fail to offer the same level of legal protection as corporate entities. If you’ve outgrown your partnership and are looking to incorporate or form a business in California, the renowned business entity attorneys at Structure Law Group can help. We’ll review your business plan and advise you on all stages of entity selection and formation, including choosing a corporate entity that is suited to your business.  We will also help prepare and file your conversion paperwork, if needed. To schedule your free consultation with a California business attorney, call us today at 408-441-7500 or contact us online.

The Difference Between Partnerships and Corporations

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Some of the world’s most successful companies started as partnerships. Microsoft, Apple, McDonald’s, Warner Bros., Ben & Jerry’s, and Google are only some examples of now corporate giants that began with only two people working together to start a business. Unfortunately, many partnerships do not work as well, often because of disputes between the partners. Many of these disputes may be avoided by simply drafting and signing a valid and appropriate partnership agreement at the beginning of operations. An experienced business attorney can help you identify which issues need to be addressed in your particular partnership arrangement.

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The law does not require an agreement

Anytime two or more people begin business operations, they automatically have a partnership. Much like a sole proprietorship, a partnership requires no filings with the Secretary of State or other formalities in order to establish the business entity. If you do not have a partnership agreement and a dispute arises, you will have little control over how the dispute is resolved. In cases without an agreement in place, California law will govern the situation and not the wishes of the respective partners, which can be problematic in many cases. For example, California law allows each partner an equal say in the management of the business, as well as an equal share in profits. This would not be fair if one partner contributed substantially more time, effort, or money to the business than the other. Therefore, not only will a partnership agreement help to avoid misunderstandings in the first place, but may also lead to a fairer resolution of any legal issues.

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