When it comes to business law, you will find that partnerships carry a lot of importance. It is crucial for you to understand the laws of partnership in order to ensure that the business is conducted in a safe and legal way between you and your partners. Legal partnerships need the intervention of skilled and qualified lawyers to help you in a large way to understand the nuances of partnerships and how they work.
Dan DeKoter Attorney- Understand the basics of partnership law
Dan DeKoter is an experienced and skilled attorney with specialization in business and civil litigation law. He helps business owners understand partnership laws and how partnership deeds should be created. The Dan DeKoter Attorney team of experts’ state that before partnerships are created, it is very important for you to understand what they are. They say that a partnership is one form of business organization where one or two individuals manage and operate the business venture with the view of making profits.
The elements of partnerships that you should understand
Each partner will share fixed proportions of the profits and losses of the partnership. There are some partnership agreements where each of the partners are also liable for the debts and the losses that are incurred by the partners. There is however one benefits of partnerships and that is they are only taxed at one time. The partnership income that flows to the partners are taxed on their partnership income. This is an advantage over companies that need to pay taxes at two levels. You will find that the income of corporations is taxed twice first for being a corporate entity and second at the shareholder levels. Here the shareholders are taxed on the dividends that are received.
Are there differences between joint ventures and partnerships?
When it comes to joint ventures and partnerships, you will find there is a difference. Joint ventures are limited to single projects that have a limited duration and timeline. However, all the members of the joint venture share the costs of the joint venture. For instance, two companies might enter into a joint venture. They will bear the costs for manufacturing a product and when it is released in the market they will also share the marketing costs. However, when it comes to profit sharing no member will share the profits of the other member. This is where the joint venture differs from a partnership where the partners share the common profits as well as the costs.
When it comes to joint ventures, there can be additional tax benefits for joint ventures over partnerships if the former is treated differently in the eyes of law as per that jurisdiction.
The Dan DeKoter Attorney team says that when you are entering into a partnership or a joint venture, it is very important for you to understand the legal implications of both well. In case you have doubts, it is prudent and wise of you to ask professional attorneys to help you in this endeavor with success!