Partnership Agreements
There are several steps necessary to form a legal partnership in Pennsylvania. However, the partnership agreement, arguably the most important step, is not technically required at all. Like good fences make good neighbors, good partnership agreements are necessary for strong businesses. From the beginning, partners should clearly understand their rights and obligations, with built-in accountability and a plan to resolve potential disputes.
At a minimum, the partnership agreement should specify the amount of capital or services each partner is to contribute to the partnership, and the manner in which losses or profits will be divided among the partners. The agreement should also outline whether and in what way new partners may be added, how decisions for the business will be made, and how partners may withdraw or be removed from the partnership.
Some partners may have different roles from others, and all roles should be clearly defined. For example, one or more partners may work full time in the business and have managerial powers while others have limited day-to-day participation in the business. Absent an agreement otherwise, state law provides general rules regarding partnerships — rules you are bound to unless you have a valid partnership agreement in place.
If you are considering forming a partnership in Western Pennsylvania, one of the smartest business decisions you can make is to reduce your verbal understanding among your partners to writing. Consult with an experienced Pennsylvania business law firm such as Scolieri-Beam Law Group, P.C. to ensure your partnership gets off to a great start.
For more information about partnerships, or to make sure your business complies with existing Pennsylvania laws and regulations, the Scolieri-Beam Law Group, P.C. can help. Contact us today at (412)765-0546 or send an email to info@scolierilaw.com.