Starting a General Partnership a Guide for Chicago Executives
Rewards and Risks of a General Partnership3 min read
Every business endeavor comes with its own set of unique risks and rewards, and the same can be said for a general partnership. A general partnership is a commercial venture undertaken by two or more business partners that allows them to share in profits and losses, though liabilities are usually limited to the amount of capital each partner contributes. This arrangement can bring significant benefits to business owners, but it can be difficult to navigate the legal waters when it comes to forming a general partnership. For corporate executives in Chicago who are looking to form a general partnership, here is a comprehensive guide to help you get started.
What Is a General Partnership?
By definition, a general partnership is any company or venture that is owned and managed by two or more individuals. Partnerships can be formed for any commercial purpose, such as operating a bricks-and-mortar store or for providing certain services such as accounting or legal counsel. The partners of the business each own an equal share in the business, unless they choose to agree to an unequal distribution, and they share in the profits and losses associated with running its operations.
Forming and Operating a General Partnership in Illinois
When forming a general partnership in Illinois, there are certain key elements that must be considered. This includes the following:
The partnership must have a name that complies with the Illinois Uniform Partnership Act, or UPA. Generally, any name that does not contain words that may confuse the public concerning the identity of the partnership, such as “corporation” or “incorporated,” is acceptable. The UPA also states that the name must include the last names of one or two of the partners, though for partnerships with more than two partners, the last names of only two partners are necessary.
Partners may contribute money, physical property, or any combination of the two as required capital for the partnership. Partners who contribute physical property must have the property appraised, with the dollar amount of the value of the property to be included in the partnership’s legal agreement.
Each partner is responsible for debts incurred by the partnership. This includes any loans taken by the partnership, as well as any monetary damages the partnership incurs due to legal suits or lawsuits.
It is highly recommended that general partnerships create an agreement that outlines the individual responsibilities, rights, and liabilities of each partner. This agreement should also include provisions describing how to dissolve the partnership, establish the management of the partnership, and distribute profits and losses associated with the partnership’s operations.
A general partnership in Illinois must be registered with the Illinois Secretary of State in order to acquire licenses, permits, and tax documents necessary for operating the business.
Seeking Professional Guidance
While operating a general partnership is a rewarding venture for business owners, failure to properly form and manage the partnership can result in costly legal ramifications in the form of monetary damages and lawsuits. For this reason, it is important to seek the advice of a qualified legal partner with experience handling corporate law in Chicago and throughout Illinois.
A number of resources are available to those looking to form a general partnership. One such resource is UpCounsel. UpCounsel provides experienced attorneys for those seeking legal counsel and advice on business and corporate matters. With an extensive network of experienced attorneys, UpCounsel can help business owners with everything from one-time consultations to creating and managing an entire on-demand legal department. UpCounsel’s services are trusted by Fortune 1000 companies and small businesses alike, and each of the website’s attorneys have an average of 14 years of experience.
When looking for experienced legal help, consider looking to UpCounsel to provide corporate executives with the legal expertise and support they need for forming and managing a general partnership.