What is a Partnership?
A Partnership is a form of business that comes into existence when two or more persons carry on business together without incorporating a company. Unlike an incorporated company, a partnership is not a separate legal entity that is distinct from its partners. As such, the income of the partnership will be reported as the income of the partners and the partners will be personally liable for the obligations of the partnership. However, you may form a limited partnership or limited liability partnership to reduce the liabilities of the partners. To learn more about the differences between a sole proprietorship, a partner, and a shareholder, read our blog post on this subject. If you require assistance in forming a limited partnership or limited liability partnership, please give us a call as we will be happy to assist you.
What are the other forms of business that can be used to carry on Business in BC?
In British Columbia, you can also carry on business as a sole proprietor or as an incorporated company.
What is a Sole Proprietorship?
A sole proprietorship comes into existence when you start to carry on business under your own name without forming a partnership or incorporating a company. As a sole proprietor, the income of the business will be reported as your income and you will be personally responsible for the obligations of your business.
What is an Incorporated Company?
An incorporated company is a separate legal entity distinct from its owners, who are called shareholders. As a separate legal entity, it can have assets or liabilities under its own name, can sue or be sued under its own name and can enter into contracts under its own name. If you require further information on what is an incorporated company and how you can incorporate a company, please see our page entitled “Incorporating a Business in British Columbia.”
What is a Partnership Agreement?
A Partnership Agreement is an agreement between the partners on the management of the partnership and it may deal with the following issues:
- What are the duties and rights of each partner;
- How the business of the partnership will be conducted;
- How the partnership will raise capital;
- What is partnership property; and
- How can a partner withdraw from the partnership.
What are the advantages of having a Partnership Agreement?
Having a well drafted Partnership Agreement is essential to carrying on business as a partnership. First, it ensures that partners are fully aware of their rights and duties in relation to the partnership, therefor avoiding future disputes. Also, having a Partnership Agreement enables the partners to vary the partners’ rights and duties to something other than those set out in the Partnership Act, which may be desirable in certain circumstances.
What is the cost of drafting a Partnership Agreement?
The cost of drafting a Partnership Agreement depends on the complexity of the agreement. Please contact us to discuss your situation so that we can give you a proper estimate of the costs involved in drafting your agreement.
Why use M.J. O’Nions Lawyer & Mediator for writing my Partnership Agreement?
We have over 17 years of experience in advising BC businesses and we have expertise in drafting a Partnership Agreement. We will do this in a cost effective manner while providing high quality professional services, so you can focus on managing your business your way. Simply fill out our contact form and a BC business lawyer will contact you within 24 hours or you can give us a call at 604-449-7779 to talk to us immediately. We will be honoured to be of service.