One of the biggest decisions faced in starting a business concerns how it is organized. This requires thinking carefully about which form makes the most sense. The problem is that you could be paying more taxes by choosing something that doesn’t work effectively for you.

A good example of this is if you choose to form a corporation. It is subject to double taxation by paying once as a corporation and again when you receive the profits. You are paying more in taxes and getting less return on your investment.

This is why so many entrepreneurs choose to form partnerships. It lets you delegate different roles and responsibilities and effectively pass on the profits. All of the partners get more money and everyone is seeing a larger return on their investment.

Things to Consider When Choosing Business Entities

Not all partnerships are the same. The law has different ones that offer unique benefits to various types of businesses. The type of partnership you choose depends on many different factors, including:

• Levels of Protection: One reason why corporations are so popular is they are considered to be an individual legal entity. This means the company can take on debt and the owners are not responsible for its liabilities. There is more to it than this, but it is the biggest reason why many entrepreneurs choose corporations. Some partnerships offer you this same kind of protection but with pass-through income. You aren’t double-taxed and have similar protections as a corporation.
• Taxation: Some businesses are fine with paying taxes twice. They see it as something to give them the structure that makes make the most sense for them. Others see double taxation as a problem and want to avoid it. They want to designate each percentage of ownership among the different partners.
• Need: Each business is different. A partnership is set up so that all of the owners will get their percentage and offer you varying levels of protection. The type of partnership depends on the needs and the complexities of your business.
• Duties and Responsibilities: Operational control sets the tone and direction of the organization. Those that are running things daily will influence the profitability and how things are going. This can be good or bad depending on the levels of risk and involvement. We recommend thinking about how active everyone will be and their role in the business. This will help you to divide the duties and responsibilities.

These factors play a significant role in deciding what kind of partnership you will establish. An attorney with experience working with business clients can help evaluate what type of structure is best for you. They will take into account potential business disputes and business transactions that may influence your operations. Our seasoned Seattle and Tacoma business lawyers can provide skilled legal counsel to guide you through this process.

Why Choose Us?

We are knowledgeable and experienced Seattle and Tacoma business partnership attorneys. We put these skills to work for you and look out for your best interests. Our team of lawyers will discuss the different options with you during the free consultation. You are under no obligation and will know which partnerships can work well for you.

We have two offices — in Seattle and Tacoma. You work with a locally based attorney that understands your case and gives you the personal attention you deserve. You will never be pushed off to an assistant or someone with fewer qualifications. A business partnership agreement lawyer will go over everything and help you establish your partnership. At Dickson Frohlich Phillips Burgess, you can always call and speak to your attorney. We keep you informed about what is happening and let you know when there are any changes. Your attorney returns all calls, texts, voicemails, and emails within 24 hours.

Our free consultation is your chance to discuss your business and what options are available. You will work with an experienced and knowledgeable attorney that will guide you.

How We Can Help

We will identify the right partnership to form for your business. You will work with a skilled attorney who will guide you and do all the paperwork. We handle everything, and you never have to worry.

Our communication is outstanding, and you will always know what is going on. We never pass you on to an under-qualified attorney or assistant. You will speak directly with an attorney that is knowledgeable in partnerships. They practice in this area of the law and will give you customized advice for your situation.

Setting up your partnership is simple, and we do it all. You don’t have to be very knowledgeable on partnerships but have an idea of what you want to create. We will identify the right solutions and help you do all of the paperwork to get everything started.

We handle your continuing paperwork such as filing with the state and keeping everything current. You will get the maximum benefits from your partnership that works with your current and future needs.

Everything is clearly stated in writing so that each partner knows their percentage, roles, responsibilities, and duties. We simplify things to give you a partnership that meets your organizational objectives, offers protection, and flow-through income. We will help you to find the most tax-efficient partnership for your situation.

You speak with a qualified and experienced business partnership attorney at Dickson Frohlich Phillips Burgess. We help you to set up everything, file the paperwork, and do the continuing regulatory filings. Our job is to make things easy so you can focus on running your business. We make all of the legal administration simple for you.

Types of Business Partnerships

A partnership is when two or more people get together and decide they want to start a business. The challenge is that the sharing of assets, liabilities, and creditworthiness with someone else can be confusing. Deciding who gets what share of the profits and assets and the people that will run the business must be clearly stated.

This is when a legal contract is created, called a partnership agreement. It lays out the percentages, debts, and responsibilities. This prevents confusion and it ensures that everyone knows what they are getting into. You have many different options when it comes to partnerships, including:

General Partnerships:

These are the most common form of partnerships with two or more people. Each partner contributes assets, money, property, and time to receive a percentage of the profits. They assume their percentage of the liabilities for the business. All partners are required to pay the debts created by the business. It doesn’t matter who created the debt — you are responsible for your percentage of it. These entities are created by a partnership agreement and are relatively simple to set up.

Limited Partnerships:

The areas of responsibility differ from limited partnerships. The general partner runs the day-to-day operation of the business and is responsible for all of its liabilities. The limited partners provide additional working capital and in exchange will get a percentage of the profits. They are involved in the business only for the profits and are not responsible for the debts or managing the business.

Limited Liability Partnerships:

You have two different options regarding these partnerships: a limited liability partnership (LLP) and a limited liability limited partnership (LLLP). LLPs are popular with lawyers, accountants, and architects. It gives each partner  ownership and offers legal protections against the company’s liabilities. LLLPs are a combination of LLPs and limited partnerships. The general and limited partners are protected against responsibility for any debts and lawsuits against the business.

Figuring out which partnership to set up is challenging and requires speaking to a knowledgeable attorney. At Dickson, Frohlich, Phillips, Burgess, our business attorneys can provide informed legal services to help you navigate your business formation questions.

Our lawyers have decades of experience and will put this to work for you. We will help you to set up the a business partnership that matches your current and future needs.

Buy-Sell Agreements

One of the biggest threats to any business is when one partner dies, retires, or cannot be a part of the business anymore. Situations like this are when you need to set up a buy-sell agreement.

This is a document that states who will control the business and what action must be taken in these scenarios. It avoids confusion and messy lawsuits over control and each partner’s percentage.

We recommend including a buy-sell agreement with your partnership agreement. It avoids any issues about who is in control and decides what will happen with the business.

The Seattle and Tacoma business partnership attorneys at Dickson Frohlich Phillips Burgess can help. You work with a knowledgeable and experienced professional who can advise you on what to do when setting up a partnership.

We listen to what you have to say to find the best solutions to avoid any conflicts. A buy-sell agreement is one way that we do this to avoid confusion.

FAQs Answered by Our Seattle and Tacoma Business Partnership Attorneys

Below are just a few of the most frequently asked questions, answered by our business partnership attorneys.

What is required to set up a partnership?

A partnership is simple to set up. It requires setting up a partnership agreement that describes the roles, responsibilities, and ownership percentages.

Do all partnership agreements have to be in writing?

You don’t need anything in writing to form a partnership. The issue is that there is no way of proving anything or that you had any ownership of the business. We recommend getting everything in writing to set expectations, roles, responsibilities, and percentages. This clearly describes what each partner contributes and what they will receive.

How are partnerships taxed?

In general, all partnerships are taxed based on the pass-through income that each partner receives. You report this income on your taxes. The business pays no taxes.

What are the most important things that should be included in a partnership agreement?

Your agreement should include investment contributions, ownership percentages, duties, sharing in profits and losses, dispute resolution, and who is responsible for the liabilities. This will clarify everything and let each partner know what is expected of them.

What are the most common issues with partnerships?

The most common issues with partnerships include a breakdown in trust, different priorities, financial inequities, conflicting management styles, and personal habits. All of these factors will create challenges for the partnership.

We recommend you consider these things when creating the partnership agreement. It avoids these conflicts and helps the business to grow.

What are the minimum and the maximum number of partners I can have for the business?

There is a minimum of at least two people to form a partnership. You don’t have any restrictions on the maximum number of partners for the business. We recommend speaking with our business partnership attorneys about what form is right for you.

Our team of business partnership attorneys will help you to find excellent solutions. You work with an attorney that will advise you on setting up your partnership and what you need to do after the business is up and running.

Contact Our Business Partnership Attorneys at Dickson Frohlich Phillips Burgess Today

If you are considering creating a business partnership, take the time to do it right. Making the terms of the partnership clear from the beginning will reduce friction and misunderstandings down the road.  The business law professionals of Dickson Frohlich Phillips Burgess will help you create a partnership agreement that protects all parties and works in the best interests of your business.

Our law firm handles many areas of law that provide us with broad experience that can help guide our clients throughout the establishment and operation of their new business. We handle real estate law and real estate litigation, business contracts, and many other aspects of business law. You can speak with a business attorney whose legal career is focused on helping you solve problems and find solutions for your business.

To get started, call us today at 206-621-1110 (Seattle), 253-572-1000 (Tacoma), 360-742-3500 (Olympia), 971-416-0881 (Portland). We look forward to working with you.