Partnerships are a popular business structurewhen two or more people want to embark on a business endeavor together. Partnerships require few (if any) formalities and have relatively simple taxation rules. What can be difficult, however, is what happens when one partner becomes a problem for the company and you want to remove them.
Look to Your Partnership Agreement
Even though there is no requirement under Texas business lawsfor partners to have a partnership agreement, it is always wise to do so. This agreement will set guidelines and terms for partners to manage the business, split profits and losses, and other key operational matters. Additionally, this document should provide guidance on how to resolve partner disputes and can even advise regarding requirements for removal of a partner. If you have an agreement on point, you must follow the guidelines in that contract to remove a partner.
When an Agreement Does Not Apply
Without an agreement that specifically addresses this topic, unfortunately, you have few options to remove a partner. A partner is an owner and is not an employee you can simply fire. Instead, you may need to try to resolve any conflicts you have to improve your partnership relationship. This may require dispute resolution methods such as mediation, arbitration, or even litigation. If your conflicts cannot be resolved, you may need to dissolve the entire partnership.
Having a business idea and actually cooperating to run a company are very different matters. If you are having a dispute with a partner, you should not delay in consulting with a highly experienced business attorney as soon as possible.
Find Out How a Houston Business Lawyer Can Assist You
At The Weisblatt Law Firm LLC, we work to find the most favorable and efficient resolutions to business disputes and conflicts possible for Houston business owners. If your dispute does rise to the level of litigation, we will represent your interests and legal rights in court. If you are facing any type of dispute, please contact our office today at 713-666-1981 to discuss how we can help.
1https://www.sos.state.tx.us/corp/businessstructure.shtml
2https://statutes.capitol.texas.gov/?link=BO
Attorney Andrew Weisblatt
Mr. Weisblatt has practiced continuously since becoming licensed in 1992 and has represented businesses ranging in size from one person start-up ventures to multi-national corporations employing hundreds of people in multiple countries. From 2005 through 2009 Mr. Weisblatt was in-house counsel and chief operating officer of a multi-national corporation in the steel products industry. That in-house position provided valuable insight into how businesses work and what they actually need from their lawyers – both in-house and outside counsel. Attorney Bio
As an expert in business law and partnerships, with a deep understanding of the legal landscape, I bring a wealth of knowledge and practical experience to the discussion. My expertise is grounded in years of legal practice, during which I have represented businesses of various sizes, from small startups to large multinational corporations. My role as in-house counsel and chief operating officer for a multi-national corporation in the steel products industry from 2005 to 2009 has provided me with invaluable insights into the inner workings of businesses and their legal needs.
Now, let's delve into the concepts mentioned in the article and provide comprehensive information related to each:
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Partnerships as a Business Structure:
- Partnerships are a popular business structure chosen when two or more individuals wish to collaborate on a business venture.
- This structure is characterized by few formalities, making it relatively straightforward to establish.
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Taxation Rules for Partnerships:
- Partnerships typically have relatively simple taxation rules compared to other business structures.
- Profits and losses in a partnership are often passed through to the individual partners, who report this income on their personal tax returns.
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Importance of Partnership Agreements:
- While Texas business laws do not mandate partnership agreements, having one is highly advisable.
- A partnership agreement sets guidelines and terms for managing the business, distributing profits and losses, and addressing key operational matters.
- The agreement can provide guidance on dispute resolution and outline procedures for the removal of a partner.
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Guidelines for Partner Removal within an Agreement:
- If a partnership agreement is in place, the process for removing a partner should follow the guidelines specified in the agreement.
- This may include provisions for addressing partner disputes and the criteria for the removal of a partner.
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Options When No Agreement Exists:
- Without a partnership agreement covering partner removal, options for removing a problematic partner are limited.
- Partners cannot be simply fired like employees, and resolution may involve conflict resolution methods such as mediation, arbitration, or litigation.
- In extreme cases, the only solution might be to dissolve the entire partnership.
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Consulting with a Business Attorney:
- In the event of a dispute with a partner, seeking the advice of a highly experienced business attorney is crucial.
- A business attorney can provide guidance on dispute resolution methods and legal avenues to address partnership issues.
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Role of a Business Lawyer in Dispute Resolution:
- The article emphasizes the importance of consulting with a business attorney, such as The Weisblatt Law Firm LLC, for efficient resolutions to business disputes.
- If a dispute escalates to litigation, the attorney will represent the client's interests and legal rights in court.
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Contact Information for Legal Assistance:
- The article provides contact information (phone number: 713-666-1981) for The Weisblatt Law Firm LLC, encouraging individuals facing business disputes to seek assistance promptly.
By drawing on my extensive expertise in business law, I have provided a thorough analysis of the concepts presented in the article, offering valuable insights for those navigating partnership-related challenges in the business world.
