There are various types of partnerships people can enter into in business that serve different purposes. General partnerships consist of at least two partners who own an entity in equal amounts. These partnerships do not require formal paperwork to be filed and can be formed upon an oral or written agreement to do business. The major downfall of this type of business relationship is that both parties are exposed to each other’s personal and professional liability. In other words, if your partner does something that results in a court order or judgement, or takes out loans for the business without paying them, you will also be responsible, and debt collectors can come after your personal assets if not paid.
Limited partnerships consist of partners like those in the general partnership who deal with daily operations and oversee the workings of the company, but also consist of limited partners. Limited partners here do not take on the liability of the other partners and are not part of the daily operations of the business. This situation is desirable for those who seek to invest in a company and have input in the decision making process, but do not wish to take on any additional liability. Limited partners have less stake in the company, and are also referred to as silent partners because they do not play an active role in the company, but help finance the entity and receive distributions as a result.
Limited Liability Partnerships
The most common type of partnership for personal injury law firms is the limited liability partnership. Limited liability partnerships can only be created for a limited number of businesses including:
- Accounting firms
- Law firms
- Architecture firms
- Medical practices
- Other fields considered professional under state-specific law
Unlike general and limited partnerships, limited liability partners are not liable for the debts of their partners, but they remain personally liable for the debts of the business. This means that when a bad business deal is made or a partner defaults on a loan and cannot pay, the debt collector or loan provider can come after that partner’s personal assets, but not the assets of the other partners if only one was responsible.
Personal Injury Claim?
If you or someone you know was injured due to the negligence of another and is seeking legal assistance from a modern and fast moving attorney who can easily work with your busy schedule, contact our office today. Attorney Bryce Angell is a licensed to practice in the state of Georgia and is willing to help you today. Feel free to reach out to our office at 800-808-6184 or online using our website portal.