General Partnership/Limited Partnership/LLP Agreement
With this General Partnership Forms Package, you will find the general forms that will assist you with the formation, management and dissolution of a partnership. You may modify these forms to suit your particular needs or situation.
What is Partnership and Its Advantages?
If you're looking to start a business, joint venture, or already have a sole proprietorship, forming a partnership can be a great option for the business partners involved. First, you need to understand the types of partnership and their characteristics compared to other business entities.
- Sole proprietorship - While a sole proprietorship has limited filing requirements for formation, it involves the most risk for personal assets. A business owner who has significant assets will not be able to protect personal assets from business creditors in the same manner as a corporation or partnership.
- Corporation - A corporation offers limited liability protection for the personal assets of its owners and the ability to issue stock to raise capital. Business creditors can't claim personal assets of business owners for legal acts taken under corporate authorization. A corporation involves the most paperwork and legal formalities when it comes to issuing stock, creating bylaws and resolutions, etc. Corporate tax rates apply, unless you qualify and opt to be taxed as a subchapter S corporation, also called an S corp. S corporations are taxed like a partnership, but must have no more than 75 shareholders, issue only one class of stock, and have no shareholders that aren't U.S. citizens or resident aliens.
- Joint venture partnership - A joint venture partnership typically involves a temporary arrangement or pooling of resources for a specific project, rather than an ongoing business concern.
- Partnership - A partnership agreement template is the founding document that defines the roles and contributions of the partners. The agreement for partnership includes terms for how profits will be divided, the responsibilities of the partners, how to manage the partnership, and how decisions will be made. A buy-sell agreement is used to control what happens to the business partnership ownership and management if a partner sells their share, resigns, dies, or becomes incapacitated in the future. Partnerships can offers tax advantages by allowing income to be taxed at the partner's individual tax rate, rather than corporate rates. However, partnership doesn't offer the same protection for personal assets that a corporation does.
- Limited partnership - A limited partnership has two types of partners. The limited partners provide financing, have little or no role in the management of the business, and aren't personally liable for business affairs. The general partner is responsible for running the business operations. General partnership also involves unlimited liability for partnership debts.
- Master limited partnership - Master limited partnerships combine the tax benefits of a limited partnership with the ability to raise capital by publicly trading stock on the stock exchange. Master limited partnerships must generate their income from "qualifying sources", according to IRS rules - typically the production, processing, or transport of oil, gas, and coal.
- Limited liability partnership - A limited liability partnership, often abbreviated as an LLP, is often confused with a limited partnership, but is a distinct entity. Laws vary by state, but they are most popular among professionals like lawyers, accountants, and architects. Some states require professional licensing to form an LLP. They offer the protection against unlimited personal liability that a corporation does, and avoid corporate taxation, allowing taxes to be apportioned among partners. Local laws on limited liability partnerships should be consulted.
US Legal Forms has a vast selection of partnership agreement templates for any type of partnership, as well as buy-sell agreements and other related forms. No matter what type of business partnership you have, we offer state-specific forms and packages to fit all your needs.