I was referred to Robert by Ruge Law Group when they were actually KRG Law Group. They handled a car accident I was involved in. This was a business debt collection levied against our company by an employee’s debt collector. He and his colleagues handled it flawlessly. He and his staff are beyond impressive and do everything they can to take the cases brought before them. I came back to them with a very big case. I don’t want to dox anyone in the office other than the name on the business. However, they handled it in the most professional, respectful, and caring way possible. J, you did an amazing job and due diligence! Robert, I wanted to personally thank you for representing us in the past and in the future. You and your paralegals are above Top Shelf. This firm is straight Louis XIII.
Business Partnership Liability: What You Need to Know
A general partnership is one of the most common types of small business, largely because it is so easy to set up. With a business partnership, you don’t have to worry about incorporation papers and other legal hurdles. However, you are trading these minor annoyances for something you might not be bargaining for—liability. Here’s what business partnership liability is and what you need to know to protect yourself.
What Is a General Partnership?
In a general business partnership, there are no incorporation papers or other legal filings. Like a sole proprietorship, a partnership is legally responsible for all actions and business decisions. That means that all partners, regardless of how much they invested, are equally liable for the business. If you are part of a business partnership, you are not just responsible for your own actions. You are responsible for the actions of all partners.
How It Can Backfire
While it is easy to set up and run a partnership, it isn’t very practical for the purposes of liability and financial responsibility. If your partner makes a bad business decision leading to a lawsuit, your property can be forfeited or your income garnished, just the same as the person who actually committed the crime or negligence. Likewise, if your partner engages in criminal activity in the guise of the business, you could be held liable and be similarly charged.
Protecting Yourself
The best way to protect yourself from business partnership liability is to form a limited liability corporation, an S corporation, or incorporate outright. In these business models, you will have fewer instances in which you could be held liable for another’s actions. If it is too late and your partner has already been negligent or committed a crime, you will need excellent legal representation.
If you are in a business partnership and are worried about liability, we can help. Contact us today for more information or to schedule a consultation.