Formation of Business Partnerships in Massachusetts
Partnerships are one of the simplest types of business entities, and our Needham business lawyer can help you decide if a partnership is the best fit for your business needs. There are less formal rules for partnerships than there are for corporations and limited liability companies (LLC), but there are some important considerations to be made.
Partnerships do not require any paperwork to be filed with the state or any fees to be paid. As such, many entrepreneurs try to save money and time by operating as a partnership. A partnership only requires two or more people working together on a business venture to make profit. All of the partners have joint decision-making authority and can bind the partnership by entering into contracts or other business deals.
Many business owners end up in partnerships by default without even intending to share responsibilities and liabilities with their “partners.” You may be exposing yourself to many serious legal risks by not filing as a corporation of LLC. Other business forms protect the owners and management from being held personally liable for debts, contracts, and other liabilities. A partnership is not for everyone, but our Needham business lawyer can help you evaluate the risks and benefits of being in a partnership.
Partnerships: Creation, Liability, and Taxes
Even though partnerships do not require formal papers to be filed, you may still be required to have a local business license, pay taxes, and if you have employees, carry workers’ compensation insurance and report employee earnings to the Internal Revenue Service (IRS). Every type of business is different, and our Needham business lawyer can make sure you follow all of the relevant laws.
If the business fails or the partnership is sued, the individual partners are personally responsible for any debts or obligations. This can be a huge problem because your personal assets and bank accounts can be subject to collection or other legal action. If you are in this unfortunate situation, an attorney may be able to help you recover losses from the other partners.
Hire a Needham Business Lawyer
If you believe that a partnership might be a good fit for your business goals, our Needham business lawyer can make sure that you develop a plan to protect your assets and grow your business. At The Law Office of Alan H. Segal, we have years of experience advising entrepreneurs and established businesses. Attorney Alan Segal believes in providing practical, cost-effective business advice. Call us at (781) 444-9676 for a consultation.