Baltimore Partnership Dispute Attorney
Ken C. GauveyPersonal Injury Attorney
Opening and running a business is a tough task. One of the first issues that those who are interested in running a business must decide is what type of business they want to run and if anyone is going to share with them in the responsibilities. Many people turn to a friend, family member, or another person when they are thinking about opening up a business, and this turns into a partnership.
Our partnership dispute litigation practice represents partnerships and employers in all aspects of employment law. Our experience extends to state and federal courts as well as government agencies. As a valued business partner, we recognize that early resolution and proactive measures are often the best course of action. Our practice recognizes that by finding solutions to issues and complaints in the workplace, it is possible to help employers avoid going to court altogether.
Types of Maryland Partnerships
Doing business in Maryland and in the Baltimore area means understanding some of the basics of Maryland business law. While some who are starting a business may want to form a corporation, others may choose to form a partnership instead. There are three general basic types of partnerships under the Maryland Code, a general partnership, a limited partnership, and a limited liability partnership.
In Maryland, a general partnership is defined as an association between two or more persons to carry on as co-owners a business for profit. There are many benefits to operating your business as a general partnership. One of the benefits of a general partnership is that it does not have to pay federal income taxes, however, it does have to pay for state income taxes. In addition, a general partnership is a legal entity similar to a person. This means that a general partnership may sue or be sued. In addition to the ability to bring a lawsuit, a general partnership can buy, lease, and sell property. General partnerships can also sell and trade stocks in its own name.
One notable feature about a general partnership is that it does not provide any liability protection for its owners or partners. However, the benefit of a general partnership is that all general partners share in the responsibilities and profits evenly and equally.
Limited Partnerships are composed of at least one general partner and other classifications of people who are referred to as limited partner. While the general partner remains generally liable for all of the obligations of the partnerships, limited partners generally are shielded from personal liability except to the extent of the investment, which has been made in the partnership. have been created by statute and require a partnership to file a certificate pursuant to §10-201 of the Maryland Limited Partnership Act. A limited partnership is taxed under the same rules as that of a general partnership, that is the limited partnership files only an information return and pays no federal or state income tax.
Limited Liability Partnerships are the newest of the partnership business forms first appearing in 1991 in Texas. Under Maryland’s LLP statute, any firm operating as a general or limited partnership in Maryland can register as a “Limited Liability Partnership” simply by filing a Certificate with the State Department of Assessments and Taxation. Being an LLP provides liability protection to individual partners in a partnership against malpractice claims or other tort lawsuits arising out of the activities of other partners, employees or agents of the partnership and also contractual claims. §9A-306(c) of the Maryland Revised Uniform Partnership Act provides that subject to specific limitations contained within the statute, “a partner of a limited liability partnership is not liable or accountable, directly or indirectly, including by way of indemnification, contribution, or otherwise, for any debts, obligations, or liabilities of or chargeable to the partnership or another partner whether arising in tort, contract, or otherwise, which are incurred, created, or assumed by the partnership, while the partnership is a limited liability partnership solely by reason of being a partner in the partnership or acting or omitting to act in such capacity or rendering professional services or otherwise participating, as an employee, consultant, contractor, or otherwise, in the conduct of the business or activities of the partnership.”
Deciding what business form you should choose to employ in your business ventures is an important decision and one that can affect not only how you do business, but will determine whether or not you can be held personally liable.
How can a Partnership Dispute Lawyer Assist a Partnership?
Business is an adventure unlike any other. Before you dive head first into the business world, there are many things to consider. One aspect that many new businesses do not consider is what happens when things go wrong. However having an experienced corporate litigation attorney can help your business from the beginning. Some of the ways a lawyer can help your partnership are:
Draft a written partnership agreement – There is no legal requirement in Maryland for a partnership to be defined by written terms. However, in the event that the relationship between you and the other general partner or partners breaks down having a written agreement is an ideal way to ensure that your business continues to run the way that it is supposed to. Having a written agreement can also outline the rules for profit sharing, establish who is liable to creditors, outlining tax responsibilities, and defining the terms of dissolution.
Defend against lawsuits or bring lawsuit on behalf of the partnership – Lawsuits are a major concern of any new or established business. They tie directors and key individuals in reading documents and contracts and require them to wrestle with complex laws and regulations. However, by hiring an attorney who is familiar with how the court system and business code works, you will be able to focus on maintaining your business in the face of a lawsuit.
Resolve partnership disputes – People who enter into business together do not always have a perfect relationship. Disputes between partners are common and can be disastrous to a business. However, many times a dispute between partners does not have to mean the undoing of your business.
Contact Baltimore Employment Attorney Ken C. Gauvey
We invite you to schedule a confidential consultation with an experienced employer defense lawyer in our law offices. Contact Ken Gauvey today at 410-346-2377.