PARTNERSHIP

Read the WARNING! first.

The English Common Law defined a partnership as "A Contract of two or more competent persons to place their money, effects, labor and skill, or some or all of them, in lawful commerce or business, and to divide the profit and bear the loss in certain proportions."

Arizona Revised Statutes § 29-206(A) defines a partnership with the following language: "A partnership is an association of two or more persons to carry on as co-owners a business for profit." A partnership, by definition, must have a business purpose. That such business purpose does not occupy anyone full time is not relevant.

A partnership agreement may be oral, although it is wiser to put the agreement in writing. An oral agreement is difficult to enforce because of the difficulty in proving the terms of the agreement. A written partnership agreement should cover, at a minimum, the following

• Name of the Partnership

• Nature of the Partnership

• Relations Of Partners To Persons Dealing With The Partnership

• Relations Of Partners To One Another Article

• Property Rights Of A Partner Article

• Dissolution And Winding Up

Generally, partnerships may be placed into the following categories:

• General Partnership

• Limited Partnership

• Limited Liability Partnership

In a general partnership all of the partners are liable for the debts and liabilities of the partnerships.  In a limited partnership only the general partners are liable for all of the debts and liabilities while the limited partners are liable only to the extent of their agreement to assume liability.  A limited liability partnership is a creature of statute and is similar to a limited partnership.

For help with an Arizona partnership call our office for a telephonic consultation*.  Call 928/445-3230 or contact us.

*There may be a consultation fee, depending upon the nature of your matter.  Call the office for details.