Top 5 Things to Consider with General Partnership Definition
Finding Legal Assistance for General Partnership Definition in Chicago3 min read
If you’re looking for legal counsel or support services with regards to general partnership definition in the Chicago area, it’s important to know the ins and outs of the process. As you explore the option of forming a general partnership – or if you’re trying to trace some of the legal limitations of an existing one – there are a few considerations you want to take into account. When engaging in legal counsel, you want to make sure you’ve got the right people for the job: UpCounsel’s network of experienced lawyers provides access to high quality attorneys on demand for small businesses and organizations alike.
Partnerships come in many shapes and sizes, but the general description of a partnership is a business entity created by several people or a group of individuals. The partnership is essentially a collective that agrees to pool resources in pursuit of a common goal. In this article, we’ll discuss the five most important things to consider with respect to general partnership definition so that you can make the informed decision about whether a partnership is the right move for you.
1. Understanding the General Partnership Definition: Overview
When it comes to understanding the general partnership definition, a good place to start is to take a look at the primary characteristics of such an arrangement. For starters, the parties involved in the general partnership must have the intent to make a profit. Additionally, the parties involved in the partnership must share a common business purpose and agree to equal division of profits or losses. It is also important to note that the general partnership definition extends to both civil and commercial collaborations.
2. Partnership Agreements
Creating a written partnership agreement is important for any partnership arrangement. This document should include an overall summary of the partnership objectives, the roles of each partner, the initial contribution of each partner, the schedule of payments, the decision-making process, and the conflict resolution process, among other crucial factors. Creating a partnership agreement is vital for any general partnership definition as it provides an outline of the relationship and it is important to update such an agreement as the partnership changes over time.
3. Dividing Profits and Losses
Partners in a general partnership are expected to divide their profits and losses equally – however, the division of profits and losses can be easily amended depending on the agreement each of the parties have made. Frequent partnership agreements arrange for the profit and expenses calculation to be based on shares or percentages. In some cases, the agreement might specify that one partner is entitled to a larger share of the profits than the other.
4. Partnership Taxes
When it comes to taxes, general partnerships must keep two points in mind: the filing status of the general partnership and the income taxes that must be paid by the partners. Generally, the partners of a general partnership must file taxes separately from the partnership itself, though the partnership itself must generally file an informational tax return. In addition to income taxes, general partnerships face multiple other taxes, including sales taxes and any applicable fees.
5. Various Types of Partnerships
Although a general partnership definition implies two or more parties sharing a common objective, the form of partnership you decide to form ultimately depends on the type of business you are engaging in. Limited partnerships, for example, involve a limited amount of liability for the partners and some partnerships may involve corporations. Before making a decision about the type of partnership you want to form, it’s important to carefully consider the applicable laws, regulations, and liabilities.
Engaging a lawyer that understands the general partnership definition is a crucial step towards reaching your business goals. With UpCounsel, you can rest assured knowing that you’ve got access to high quality attorneys on demand. From small businesses to the Fortune 1000, UpCounsel provides high quality, cost-effective legal services, so you can focus on building your business.