The definition of a general partnership is simple on the surface but can become more complicated when you delve deeper. Dallas businesses seeking counsel that understands local regulations have many questions on general partnerships and the following will hopefully answer them.

It is important to understand that partnerships, whether general or limited, are recognized by most jurisdictions as separate and distinct from the individuals and other entities that comprise them. This means that the entity itself may have rights and obligations independent from them. A general partnership is a business entity formed by two or more people, each of whom is personally liable for the partnership’s debts and obligations.

Generally speaking, a general partnership involves two or more people coming together to run a business and share the profits, and the liability associated with them. According to the Internal Revenue Service, the primary characteristics of a general partnership are that they’re composed of two or more partners, and the partners are personally liable for the partnership’s debts and obligations.

In the State of Texas, where Dallas is located, a general partnership initially starts as an unincorporated business and requires a written agreement to set out the duties, rights, and liabilities of the partners. This can be done either through a memorandum of understanding, in which the parties agree to the partnership structure, or through a more formal partnership agreement.

For a general partnership business, all of the partners are both jointly and severally liable for the debts of the partnership, which means each partner is generally held responsible for the full amount. This means that if the partnership does not have enough money to cover a debt, the creditor can decide to go after the assets of any of the partners. In the case of limited partnerships, the liability is limited to the contribution made by each partner.

A general partnership in Texas can be either registered or unregistered. If registered, the partnership must apply for an entity number with the Texas Secretary of State. The name of the business must be registered with the Secretary of State and the documents that must be filed with the state and regularly updated are the Certificate of Formation, the Certificate of Amendment, the Certificate of Merger, and the Certificate of Dissolution.

In the State of Texas, general partnerships are governed by the Texas Business Organizations Code. Texas General Partnership laws are very specific on the introduction of new partners, the sale of interests, the dissolution of the partnership, and other struggles commonly faced with the partnership ownership structure. Therefore, because of these complexities, it’s highly advisable to involve a qualified business or corporate lawyer in the formation of a general partnership.

Business attorneys from UpCounsel have an average of fourteen years of experience, and profiles of these online attorneys display client ratings and reviews of recent work. So, whether you need a one-time consultation or an entire freelance legal department for your business, UpCounsel’s network of experienced lawyers is the perfect solution to ensure the best legal support is provided for any general partnership issue you may encounter.


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