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L. Reed Bloodworth is Founder and CEO of Bloodworth Law located at 801 North Magnolia Avenue, Suite 216 in Orlando, Florida.
Reed discusses what kinds of business partnerships are there in Florida?
Bloodworth Law handles business litigation, including litigation related to various types of business partnerships. Reed is frequently hired to resolve disputes that arise in partnerships after the businesses are formed.
Business disputes can be very contentious and lawsuits are expensive. When you decide to start a business with a partner, each party should be represented during the formation of the partnership using their own attorney. Now, these are general overviews. If you need more information, you should speak with an attorney.
First, What is a General Partnership?
- In a General Partnership, unless there is a writing to the contrary, everyone named in the partnership has the same authority, the same input into decisions, and the same share in profits and losses.
- Partners hold equal liability meaning their assets are at risk when the company takes on debt.
- And, Partners are liable for negligence, business torts, or other actions of the other partners.
Second, What is a Limited Partnership?
- A Limited Partnership has more restrictions because limited partners (also known as silent partners) don’t have equal say in business operations.
- The company’s management is handled exclusively by general partners.
- The limited partners’ obligation is to contribute financially towards the partnership. And, because their control of the limited partnership is minimal, the limited partners are only liable for their own capital contributions.
- The general partners do not enjoy that same liability protection.
Third, What is a Limited Liability Partnership?
- A Limited Liability Partnership is often put together by people in professional services. Partners can establish exactly how the firm is run.
- All property and funds are owned by the partnership, but some or all partners can hold a limited liability.
- As in a general partnership, one partner can enter into and commit all partners to obligations under a contract whether they consent or not.
- This type of partnership also has the added benefit of being treated as a pass-through entity for tax purposes.
Finally, there is a Limited Liability Limited Partnership (LLLP)
An LLLP is a limited partnership where all partners enjoy limited liability, which protects the partners’ assets from various debts and legal actions. This type of partnership also allows some partners to act as general partners and others to act as limited partners.
These are abbreviated descriptions and explanations of very complex partnerships. When you decide to start a business or want to partner with anyone, build and vet your team carefully. Have an attorney generate the formal business and operating agreements outlining the entirety of the partnership.
L. Reed Bloodworth is the Founder and CEO of Bloodworth Law. If you’re experiencing issues forming a business or are currently facing a partnership dispute in Florida, give Reed a call to talk about how Bloodworth Law can help you or your business.