Utah Partnership Concepts
Partnerships are Contract Based
A general partnership is a creature of both of statute and contract. Most business organizations, such as a corporation, are created by filing a public document pursuant to a statute. Partnerships, however, are not created in the same way. Partnerships are created when two or more persons’ actions show an intention to associate as co-owners in a business for profit. These actions can be by word or conduct or both and those actions create a contract between them.
Often times general partnerships have written partnership agreements. They can be detailed and run hundreds of pages long. Other time partnerships have no written agreement at all. Either way a fundamental aspect of a general partnerships is the contract-based relationship between the partners.
Partnerships are Statute Based
Another fundamental aspect of a partnership is the statutory context in which contracts between business partners arise and exist. In Utah a partnership statute provides that context determining whether a partnership exists. It also governs the relationship of the partnership and its partners with outsiders as well as when a partnership ceases to exist and what then happens to the interests, assets, and liabilities of the partnership.
Partnership Created by Contract and Statute
Combining the aspects of both contract and statute, a partnership is created. “A partnership is an association of two or more persons to carry on as co-owners a business for profit.” (Uniform Partnership Act). Partnerships are easy to create. Its creation involves no special formalities. No magic words need to be said or documents signed. If a business structure has the essential characteristics of a partnership, then it is deemed one.
Our Lawyers Will Help You Decide if a Partnership is Right for You
Because partnerships are easy to create, many people find them attractive to create when pursuing a business venture. Partnerships do have many disadvantages, though. Contact the lawyers at the Salt Lake City based Salcido Law firm to find out if a partnership is right for you. Our business law attorneys will help you decide if you should form a partnership or if something else is needed such as a corporation. Call us today at 801.413.1753.