Partnership Lawyer in Greenville, SC

Partnerships are one of the most intuitive and simple entities to form in the State of South Carolina. Partnerships tend to require a small amount of paperwork while rarely requiring public filings. A partnership agreement is critical to ensuring that partnerships are able to last through turmoil if any may arise. If you are interested in establishing your own partnership, a partnership lawyer in Greenville, SC can help.

Understanding Partnership Agreements

When you launch a business as a partnership, a partnership agreement sets the rules for its operational framework. A partnership agreement is a legal contract that establishes the rules governing of the partnership. It also establishes the roles and responsibilities of the partners. Partnership agreements are crucial in establishing rules on how the business should operate on a day-to-day bases or even in the event of a business crisis, including the death of a partner or dissolution of the partnership.

Types

While most partnership agreements tend to share the same elements and often require the same structures of clauses and provisions, although there will be differences based on the type of partnership. There are three common types of partnership structures available for small businesses in South Carolina:

• General Partnership (GP). A general partnership is a business arrangement by which two or more individuals agree to share in all assets, profits and financial and legal liabilities of a jointly-owned business structure. Such partners agree to unlimited liability, which means either of their personal assets may be liable to the partnership’s obligations. In fact, any partner may be sued for the entirety of a partnership’s business debts.

• Limited Partnership (LP). Management of a limited partnership rests with the “general partner,” who also bears unlimited liability for the company’s debt and obligations. A limited partnership allows for any number of “limited partners,” whose liability is limited to the total amount of their investment in the company.

• Limited Liability Partnership (LLP). A limited liability partnership is a partnership in which some or all partners (depending on the jurisdiction) have limited liabilities. It therefore can exhibit elements of partnerships and corporations. In a LLP, each partner is not responsible or liable for another partner’s misconduct or negligence.

Uniform Partnership Act

Partnership Lawyer in Greenville, SC

Partnerships that fail to establish a partnership contract are governed by the Uniform Partnership Act. These partnerships in Greenville, SC are governed by South Carolina law and the Uniform Partnership Act. The Uniform Partnership Act lays out defaults that are applied by applicable South Carolina laws to operations and disputes regarding partnerships. It is important to guarantee that you have full control over how your business operates by using a partnership agreement which will augment any default to the Uniform Partnership Act.

Key Terms and Provisions in Partnership Agreements

Although every partnership agreement will differ slightly, all partnership agreements must address certain issues through the following key terms and provisions.

• Name. The first clause must establish the business name “Doing Business As” or fictitious name.

• Ownership Percentages. All ownership percentage re-allocation must be clearly identified.

• Capital Contributions. It is important to establish capital contribution requirements of each member and at which stage of business those contributions may be required.

• Profit and Loss Allocations. The allocation of profits and losses must be identified.

• Distributions. These establish when a timeline or events for when the profits of the business should be disbursed to the partners, and which partners, if any, earn a salary.

• Partner Authority. Unless otherwise stipulated, all partners have equal and unlimited authority to commit the business as they see fit. This power can be limited in this clause or require joint authority for large decisions.

• Management. This section generally assigns major management duties of the partners, especially vital procedures such as accounting.

• New Partners. This clause details the procedure to add new partners.

• Death/ Disability. This clause defines what happens to the partnership after a partner dies or is incapacitated, and, in the case that the partnership continues to exist, defines the authority of the beneficiaries of the partner who left.

• Dissolution. This clause defines situations under which the business will be dissolved, as well as exit strategies for any single partner who wishes to leave.

• Dispute Resolution. Even the best partnerships sometimes experience disputes. This clause explains the procedures for resolving such conflicts.

Registering a Partnership

In South Carolina, partnerships registration is required. In South Carolina, general partnerships must  be registered at the county level where you  anticipate conducting business operations, while LPs and LLPs need to register with the Secretary of State.