Articles Tagged with partnership agreement

When multiple individuals begin conducting business together, they may have effectively created a partnership, even if they didn’t intend to do so.  Thus, even though partnerships can be formed without the partners actually signing a partnership agreement, the partnership and its partners become subject to state laws governing partnerships.  The California business attorneys at Structure Law Group, LLP understand the laws and mechanics required to build a strong foundation for a partnership.  Being careful and meticulous about the partnership formation process can also help to prevent litigation if and when a dispute arises between and among business partners.

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Partnership Agreements

 Although not required under California law, as discussed above, entering into a partnership agreement when forming a partnership is highly recommended.  A partnership agreement is a legally binding contract that, among other things, dictates the roles of the partners and establishes guidelines for management of the partnership.  In addition, partnership agreements set out how potential legal disputes will be resolved.

A partnership is created whenever two or more people agree to do business together for a profit. Additionally, partnerships should ensure that they follow sound business practices once they begin their new venture.

Steps in Forming a Partnership

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The first step to forming a partnership is choosing its name.  In California, a partnership may use the last names of the individual partners or any fictitious names. If a fictitious name is used, it must be distinguishable from the name of any business name that is currently on record.  Before choosing the name, a search should be run in the following databases such as California Secretary of State or The United States Patent & Trademark Office.   If a fictitious name is used, the state of California requires that a fictitious business name statement is filed in the office of the county clerk where the partnership intends to do business.  The fictitious business name must also be published in the county newspaper for four weeks.

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