Our attorneys have helped entrepreneurs and business owners draft partnership agreements for New Jersey businesses in a diverse variety of industries, including construction contractors, tech businesses, publishers, restaurants and professional service businesses.
Why Partnership Agreements Are ImportantHaving a well-drafted partnership agreement is the most important thing a New Jersey business can do to ensure successful, conflict free operations. While most ventures are started by owners with high levels of trust and optimism, even the best relations can break down during the day to day challenges of running a business. Partnership disputes can be devastating for businesses - they can disrupt operations, cause internal dissension, lead businesses to fail and result in litigation. A good partnership agreement can go a long way to avoid these problems.
Moreover, partnership agreements allow the partners to take matters into their own hands and write their own rules. Without a partnership agreement, the partners’ rights and obligations are spelled out by New Jersey partnership law. This law, written for generic partnerships, will govern your particular business if you don’t have a partnership agreement. It is far better to have a well-written partnership agreement and control your own fate.
Is a Partnership the Right Form For a Particular Business?The first step should be deciding if the partnership form is right for your venture. Partnerships have many advantages. For instance, the business is not taxed profits, avoiding the “double taxation” of a corporation. Likewise, partnerships are very flexible; any two people can form a “de facto” partnership just by operating together as business owners, even without any paperwork. However, partnerships have drawbacks, as well; for instance, partners are personally liable for their business’s debts, unlike corporations and limited liability companies (“LLC’s”).
Our Attorneys’ Unique ExperienceOur attorneys bring many advantages to preparing partnership agreements. For instance:
Partnership agreements should clearly address the many issues that the venture will face, spell out the owners’ rights and responsibilities, avoid disputes, and resolve disputes when they occur. For example:
Partnerships are normally for businesses, but not always. For example, family members or friends may jointly buy a vacation home at the Jersey shore. This is a de facto partnership. Since property is a valuable investment, whether it is for income or pleasure, an agreement setting the ground rules among the owners is vital. Indeed, it’s not just money that is an issues – in a vacation home the times that each owner gets to spend there should be specified.
It is advisable that every partnership “whether for profit or not, have a solid partnership agreement.
Contact UsPlease e-mail us or call one of our attorneys at (973) 890-0004 to find out about drafting a partnership agreement.