The general partnership is created when two or more persons engage in a business for profit. Advantages include ease of management, flexible decision making, and ease of formation.
A general partnership as an association of two or more persons to carry on a business for profit as owners regardless of whether the persons intend to create a partnership or whether the association is called a partnership. Liability for partners is unlimited in a general partnership.
General partnerships are governed by Chapter 152 of the Texas Business Organizations Code. But there is no requirement that any paperwork be filed in order to create a partnership.
Texas law sets out various factors to be considered in determining whether a partnership has been formed including: (1) right to share in profits of the business; (2) expression of an intent to be partners; (3) right to participate in control of the business; (4) agreement to share losses of the business or liability for third party claims against the business; and (5) agreement to contribute money or property to the business.
In the absence of a specific agreement between the partners, the code dictates the rights and privileges of the partners. Additionally, as with a sole proprietorship, the general partnership offers the partners no protection from the debts and obligations of the partnership.
Absent an agreement otherwise, all decisions made in the ordinary course of business may be made with the consent of a majority of the partners. Because the partnership is a separate legal entity, all partnership property is owned by the partnership rather than by the individual partners. And an individual partner can bind the partnership to an agreement.
If you think that you need to talk with a Waco business lawyer about a general partnership, please call Dunnam & Dunnam at 254-753-6437.
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Eleeza's practice areas include: Personal Injury Law, Civil Trial Law, Commercial Law, Family Law and Pharmaceutical Law.Read More
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Jim Dunnam is a Board Certified Specialist in both Civil Trial Law and Family Law.Read More
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Merrilee L. Harmon is a Family Law specialist, Board Certified by the Texas Board of Legal Specialization since 1985.Read More