In its simplest form, a partnership splits the profits, losses, and legal liabilities of a business between all involved parties. However, these business arrangements can take any form that the parties desire, as long as they agree to those terms.
When forming a partnership, it is essential to place these obligations in writing. Creating a comprehensive partnership agreement can make the rights and obligations of all partners clear. Additionally, this document can carry legal weight in court should any disputes arise.
A Bloomington partnership agreements lawyer could help you write an agreement that meets your needs. With the help of a skilled business attorney, you can feel confident that your rights and your business is protected.
The Legal Effects of a Partnership Agreement in Bloomington
Creating a clear, binding, legally valid partnership agreement is key to starting any business venture. Whether the partnership is between two longtime friends or multiple investors who have never met, it is essential that all parties understand their rights and obligations in the business.
These rights and obligations are outlined in a partnership agreement. In general, the partnership agreement may contain whatever terms to which the parties agree.
However, state law also places obligations on business partners. For example, MN Statute §323A.0404 requires all partners to assume a duty of loyalty to the other. This includes discharging all required business operations in the best interest of the other partner, as well as to not take any action with the intent of harming the business. A Bloomington partnership agreements lawyer could help explain the interactions between partnership agreements and state laws.
When is an Agreement Necessary?
A proper partnership agreement is required whenever two or more people decide to go into business together. There are a few key provisions that any partnership agreement should contain. These are:
- Basic identifying information, such as the name of the partnership, how long it will last, and where the business will operate
- Financial issues that include the contributions of each partner, how to distribute profits, and the ability of each partner to outlay money
- The role of each partner in the day-to-day operations of the business
- How the relationship may change, such as in the adding of a new partner, modifying the roles of partners, or adding new investors
The formation of a partnership agreement falls under the umbrella of contract law. This means that courts will rarely consider the fairness of these agreements should a dispute arise. However, courts do retain the ability to require one party to fulfill their obligations under the terms of the deal. For this reason, it is especially important to draft detailed and thorough partnership agreements that aim to eliminate any potential conflict before it arises.
Reach Out to a Bloomington Partnership Agreements Attorney
Signing a partnership agreement that outlines the rights and obligations of all parties can be beneficial for everyone involved in the organization. These can include terms for the formation of the business, the roles that the partners will play, and what is to be done with any profit or loss. A Bloomington partnership agreements lawyer could help to form these agreements as well as fight for their validity in court. Contact an attorney today to get started.