Business Partnership Liability: What You Need to Know

October 20, 2019

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.

Our Testimonials

What Our Clients Say

Drew was excellent. Did what we needed to do. Was very professional and is a class act.

I wanted to thank you for supporting and believing in me all these years, Robert! You have definitely been an inspiration in my life and I appreciate you so very much!

Rob, I cant thank you enough for putting my mind at ease & taking time out of your day to handle my ticket. You’re a boss!

Positive: Professionalism, Responsiveness Mr Eckard and his staff swiftly resolved my issue without much back and forth and was communicating with me throughout the entire process. I was not sure what to expect as I never needed services but the outcome was great. More importantly the treatment and communication was exceptional-I would have no reservation to use this office in the future!

Positive: Professionalism, Quality, Responsiveness Drew Patterson was always available when I needed a consult and anything I needed and also very prompt with answers to all my questions. I would use them again for any legal issues. Thank drew for all you have done for me and my practice

view all testimonials
Stay Connected

Get Updates About Our Firm

Our Attorneys encourage client input to customize a strategy to provide the legal services you deserve. We provide experienced representation for those in Florida and now Texas.