Partnerships

What Is a Partnership?

A partnership is a business structure where two or more people share ownership of a business. It's one of the oldest and simplest ways to go into business with someone else. But "simple" doesn't mean you should skip the legal work. In fact, partnerships without a solid agreement in place are one of the most common sources of business disputes.

There are two main types. A general partnership means all partners share management responsibilities and liability equally — including personal liability for the business's debts. A limited partnership has at least one general partner who runs the business and one or more limited partners who invest but don't participate in day-to-day management, with their liability capped at their investment.

Why You Need a Partnership Agreement

Going into business with someone is a big commitment. A partnership agreement lays out the ground rules — who contributes what, how profits and losses are split, what happens if a partner wants to leave, and how disputes get resolved. Without one, Missouri's default partnership laws apply, and those may not reflect what you and your partners actually agreed to.

A good partnership agreement also addresses what happens if a partner dies or becomes incapacitated. This is where a buy-sell agreement comes in — it establishes a process and price for transitioning a departing partner's interest so the business can continue operating without disruption.

You'll also want to think about how the partnership interacts with each partner's personal estate plan. If a partner's share isn't addressed in their trust or will, it could end up in probate — creating uncertainty for the surviving partners and the decedent's family.

Formation and Compliance

Forming a general partnership in Missouri doesn't require a state filing — it can exist simply by agreement between the partners. However, you'll still want to obtain an EIN, open a business bank account, and file a DBA if operating under a trade name. Limited partnerships do require filing with the Secretary of State and designating a registered agent.

The Taormina Firm's Partnership Services

Vince works with you and your partners to draft an agreement that covers all the important bases. He asks the tough questions upfront — the ones most people don't think about until it's too late — so your partnership starts on solid ground. He'll also coordinate your partnership structure with each partner's estate plan to make sure there are no gaps. Whether you're forming a general partnership or a limited partnership, The Taormina Firm has you covered.