Business Litigation and Partnership Agreements
Any business has the potential to run into lawsuits, contract disputes, or other complications that can detract from day-to-day operations. It is important for small businesses to have business litigation lawyers to settle potential disputes or put measures in place to minimize the number of such disputes, so that they can focus on running their company.
When a business is being run by a partnership, it is especially important to have a partnership agreement in place. Attorneys at Froerer & Miles are very knowledgeable in business litigation and partnership agreements. They can assist small businesses in the Ogden, UT, area in drafting a partnership agreement that is suitable for their business needs.
What Is a Partnership Agreement?
A partnership agreement is a legal contract that outlines the nature of the business and specifies the rights and responsibilities of each business partner. It is highly recommended for any partner-run business. This document allows our Layton clients to clearly establish and define the roles and responsibilities of each partner. Should any disputes come up, the agreement can serve as a protection for all involved partners.
When Should a Partnership Agreement Be Drafted?
Ideally, a partnership agreement should be drafted prior to starting a business. When composed during the business planning stages, a it serves as a draft for how the business will be run and highlights each partner’s expectations for the business, as well as their individual responsibilities to the company.
However, while it is typically better to answer these questions as early as possible, it is never too late to draft a partnership agreement. We can assist those of our Salt Lake City clients who neglected to create such an agreement at the start of their business in doing so now. No matter how long a business has been in place, it can be beneficial to legally clarify how it is managed and operated.
Aspects of a Partnership Agreement
A partnership agreement is tailored to each business’s needs, so every contract is unique. But all agreements should cover key aspects of the business arrangement, such as:
- Business purpose – A brief description of the business that the partnership will run.
- Partner information – Name and address of everyone involved in the partnership.
- Capital contributions – Detailed information regarding cash or assets that each partner contributed to the business.
- Ownership interest – Defines the percentage of the business that is owned by each partner.
- Profit and loss distribution – Defines how profits and losses will be distributed among partners, which is often determined by capital contributions and ownership interests.
- Management and voting rights – Outlines who is responsible for daily operations, how the business will be managed, and the voting procedure for important business decisions.
- Partner addition or withdrawal, partnership dissolution – Establishes guidelines for adding a partner to the business, allowing partners the opportunity to withdrawal, or how assets will be divided if the partnership is dissolved.
If you run a small business, the business litigation attorneys at Froerer & Miles can handle legal services so that you have more time to focus on management and daily operations. To learn more about the business services we provide, send us a message at your earliest convenience or call our practice at (801) 614-2934.