General Partnerships & Limited Partnerships in FloridaFlorida Partnerships: In the world of business, a Florida partnership usually refers to a general partnership. In a general partnership, one or more people own and operate a business, and normally have not filed papers with the Florida Department of State to make their business a corporation.
A general partner is one that actively runs the business and is personally liable for all business debts and court judgments.
General partners can also bind the whole business to a contract or business deal.
There is no requirement for any official state filings for a general partnership under Florida business law.
Legal Partnerships in Florida
The only paperwork needed is an agreement between the two or more general partners.
Florida statutes allow partners to form multiple types of businesses outside of corporations.
These include a Limited Partnership, a Limited Liability Partnership, and a Limited Liability Limited Partnership.
Each of these are unique in how the law handles each type of partner and defines who is liable for what in terms of the business.
Florida Limited Partnerships
Limited partnerships have at least one general partner and one limited partner.
A limited partnership must be formally filed with the Florida Department of State and follow all information contained in the Florida business law.
Once a limited partnership is filed with the state of Florida, limited partners are essentially investors that give up some form of management, but are not personally liable for business debts and judgments.
A huge advantage of limited partnership is that a limited partner does not have to pay self-employment taxes since most limited partners do not actively engage in management of the company itself.
However, if the limited partner does take an active role in the business they lose this benefit.
Florida partnership law does allow an individual to have a dual role as both a limited partner and a general partner, but they must separate how they file their financial statements and taxes.
To form a limited partnership a certificate of limited partnership must be delivered to the Department of State for filing.
As with all Florida partnership filings, the state will then issue certificates to each partner showing they are legally partners.
Another form of partnership is limited liability partnership. A limited liability partner is considered a general partner, but they are shielded from the malpractice suits and negligence of other partners.
This type of Florida partnership business set up is especially suited for professional groups such as lawyers, doctors, and accountants.
The reason for this is because of the advantage mentioned above, they are not liable for the other partner’s problems but still gain the credibility and helpfulness of working with partners.
Creating a limited liability partnership in the state of Florida requires that each partner file a certificate of registration and a statement of qualification for Florida or Foreign LLP.
Once these Florida Partnership forms are filled out and filed with the Florida Department of State, the partnership becomes legal and the state will issue a certificate to each partner showing they are registered partners.
A limited liability limited partnership is covered in chapter 620 along with the other types of partnerships.
This type of Florida partnership combines the limited partnership and limited liability partnership.
All partners that actively run the business are limited liability partners in that they are not liable for the misconduct or malpractice of the other partners.
In addition to the active partners, the partnership may also contain other limited partners that do not actively take part in management of the business.
These limited partners are generally investors and follow all of the information mentioned above covering limited partnerships.
As with the legal partnerships mentioned above, all partners must be registered with the Florida Department of State and fill out the appropriate forms in order to form the limited liability limited partnership.
In all types of partnerships, a partnership agreement must be made between partners.
This partnership governs all relations between partners, and all partnership agreements must be made in accordance with chapter 620.1110 of Florida statutes.
This section of Florida law does not limit the roles of partners in a business, but it does list information a partnership agreement cannot include which revolves around the legal rights of the various partners in the business.
A partnership agreement may be written, verbal, or implied, but it is recommended that all agreements be formal in nature and written so that all partners understand their roles in the business.
No matter which type of partnership one is interested in, forming the partnership is the easy part. Filling out all of the correct forms and choosing the best type of legal partnership is not as easy.
If unsure of the right partnership, seek the counsel of an attorney or legal aid before filling out the paperwork.
A document preparation agency can also help with filing the forms and filling them out correctly if anything appears to be ambiguous.
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