Under RUPA, partners can change some of the standard rules by applying a written partnership agreement. In a well-written partnership agreement, partners can explain who has the right to manage the partnership, how partners share benefits, how partners cover partnership losses or cover additional capital requirements, the responsibilities of each partner (who will do what) and how the partnership will dissolve. Unfortunately, RUPA does not allow partners to limit the personal liability of one or more partners for debts and partnership commitments. To acquire personal liability, Shield requires the parties to form a California company or limited liability company (LLC). Often, in a partnership agreement, a lawyer indicates that the partners, when they take a certain step, unravel the partnership and involve either partnership activities or the establishment of an LLC. A partnership is a form of community enterprise for two or more people. It is created automatically without the counterparties being obliged to file documents with the Secretary of State when the counterparties engage in a common commercial purpose. While partnerships are governed by general laws, state law allows partners to change the « standard » rules by entering into a partnership agreement. A partnership agreement should define the name of the partnership and the conditions of its existence. According to the law, a partnership can use the name of any partner to do business or use a fictitious business name, also called « doing business as » or DBA. The partnership may also last a certain period of time or until a particular project is completed, or it can be maintained as it pleases as long as the partners choose to remain active together.
If you would like our office to prepare a well-written general partnership agreement for your California business, call 818-849-5206. If, on the other hand, you would like to discuss the business entity (company, company or individual company) that best meets your needs, please agree to a 30-minute telephone consultation at a lower cost. In many ways, a business partnership is like a personal partnership. Both types of partnerships must have clear knowledge.