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Mar 10

How a Los Gatos Business Lawyer Can Help Define Your Partnership

Los Gatos Business Lawyer Silhouettes of Business People in Blurred Motion Walking A Los Gatos business lawyer may be able to help you file for a partnership, which is defined as a legal business relationship created between two or more parties. These individuals form a business as co-owners and generally operate on equal terms. A partnership is different from a standard corporation in that a partnership is not actually a separate entity from the individual owners. While corporations are taxed as separate entities, income tax is collected from the individual partners in a partnership agreement. This taxation may be collected from both parties equally or according to another agreement.

Registration

Most partnerships are registered with their home state. However, many states allow non-resident partnerships to file for registration as visiting companies. Registration requirements vary from one state to another.

Characteristics

Partnerships utilize a partnership agreement to ensure that the relationship between the partners is clear. The partnership agreement also helps to allocate the roles and responsibilities of each partner, including their profit shares and losses within the partnership. All partners are taxed based on the loss of the partnership on their personal income tax return. Partnerships file Form 1065 with the IRS. Limited liability companies with multiple members also file income taxes as a partnership. Your secretary of state may be able to help you determine the requirements for registering your business as a partnership within your state.

Types of Partnerships

There are various types of business partnerships, just as there are multiple types of corporations. A general partnership is formed with only members who play a role in the day-to-day operations of the business. A limited partnership includes both general partners and limited partners who may invest in the business but not have a role in day-to-day operations. A limited liability partnerships is different from both general and limited partnerships in that members are shielded from liability for negligent acts from other partners.

Contact a Los Gatos Business Lawyer

Contact the Freed Law Firm today at 831-661-0300 for more information on filing for a business partnership. The right Los Gatos business lawyer may be able to help you protect your interests while creating a strong partnership.