Unsuspecting partners
December 3rd, 2008
Yesterday, while talking with our utah web designer about business entities I once again realized how often people unexpectedly enter legal business partnerships. Why does this matter? Well to answer that you really have to know what it means to be part of a legal partnership.
Wikipedia defines a partnership this way:
In the commercial and legal parlance of most countries, a general partnership or simply a partnership, refers to an association of persons or an unincorporated company with the following major features:
- Created by agreement, proof of existence and estoppel
- Formed by two or more persons
- The owners are all personally liable for any legal actions and debts the company may face
I would add a few other features:
- In the absence of an agreement otherwise, general partners split profits equally
- In the absence of an agreement otherwise, losses follow profits
