If you’re starting a business, there are plenty of options available for the type of entity you want to form, including:
This article focuses on the Partnership – a common term used in business, but what many might not understand is a formal legal entity. Under Virginia law, a partnership is created when two or more people agree to carry on a business for profit as co-owners. As opposed to the LLC or Corporation, the partnership entity requires no type of filing or documentation (unless the partners want to create a limited partnership). Thus, if you have ever run a business with a friend and you both split the profits, you just might have entered into a partnership!
Partnerships were extremely popular in early corporate history but have since been mostly phased out by the Corporation and LLC. There are a few distinct characteristics of partnerships that render them less popular.
First, partners in a partnership, generally, share equally in the profits and equally in the losses. Virginia law allows for the partners to create an agreement and change those percentages, but the main point is – partners are personally liable for the partnership’s debts and obligations.
Second, partnerships require unanimous support for major decisions including adding a new partner and other major business decisions. This can of course be changed in an agreement, but these rules are a lot less flexible than other entities.
Partnerships are not the most popular entity out there, but they are still around and important to know about! Our team recommends the LLC or the Corporation for most businesses. We generally recommend that our clients avoid establishing partnerships. The biggest mistake we see people make is accidently establishing a partnership since no formal filing is required. Are you interested in starting up a business? Please reach out to us! Our team provides turn-key solutions to your business through an efficient streamlined process. We have assisted hundreds of businesses with formation. Give us a call today!
McCormick Law & Consulting was integral in the creation of our non-profit. We promised our 12 y/o son that we would keep fighting cancer for kids like him but we couldn’t have kept that promise without John McCormick and his team. We were hooked at our first meeting when John simply asked “ Tell me about you son.” McCormick Law and Consulting took care of all the legal work while allowing us to focus on our mission. John and his team continue to be a great resource and supporter of D-Feet Cancer The Dalton Fox Foundation. We couldn’t have asked for better legal representation. Thank you McCormick Law & Consulting.
I definitely could have created my new business, Davis Wealth Management LLC, but boy that would have been a mistake. Because business formation is not an area in which I practice, I had no idea where my blind spots were, and let me tell you there were plenty. The knowledge I received from the firm is invaluable.
John McCormick and his firm are very reasonably priced and quickly and efficiently assisted me in creating my new business. It was completely turn key; they did everything for me. I can't recommend their services enough. Also, huge shoutout to Taylor who kept me informed every step of the way!
John and his team were great to work with. They provided advice for starting my business and set everything up in an efficient and timely manner. I will definitely recommend them to others!
I contacted McCormick Law firm to register my moving service in NC. They did an outstanding job. Completed the process way sooner than I expected. Thank you, Taylor.
McCormick Law, PC d/b/a McCormick Law & Consulting and Driving Defense Law is a boutique law firm located in Norfolk, Virginia & Raleigh, North Carolina, that seamlessly serves clients throughout Virginia and North Carolina. Whether you are a new or existing client of the firm, McCormick Law, PC, cannot represent you on any new matter until the firm has made a determination that there is no conflict of interest and that it is willing to accept the new engagement. The testimonials on this website reflect the real-life experiences and opinions of our clients. However, the experiences are personal to those particular clients, and may not necessarily be representative of all clients. We do not claim, and you should not assume, that all clients will have the same experience. Your outcome may vary.
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