Colorado Business Partnerships
Effective Business Partnership Litigation Firm in Denver, Colorado
Solve CO Business Partnership Disputes, Avoid Personal Liability.
Call 720-941-7200 for a free initial consultation.
Watson & Associates, LLC have successfully represented Colorado business partners in a wide range of disputes, including real estate disputes, failed business ventures, family partnerships gone awry, and fraud. Our Denver attorneys can represent your
rights when you are victimized by dishonest partners in control of partnership assets and partners who were wrongfully ousted from partnerships by those in control. The key to any corporate partnership is education during the formation stages. When forming a Colorado business partnership, you must learn your legal responsibilities to each partner, the business entity and learn how to avoid personal liability. The effect of a solid partnership agreement can save you headaches and stress in the future. You may also be subjected to a partnership dispute and are seeking to understand your rights under Colorado law.
Denver CO Business Partnership Services
With the advantage of our lawyers’ knowledge, skill and experience, we help our clients:
- Draft contracts
- Craft tailor-made partnership agreements
- Build provisions into contracts for eventual partnership dissolution
- Determine in advance how profits will be divided
- Personal liability issues
- Outside counsel services
- Allegations of fraud
- Personal liability concerns
- Service contracts and contract law representation
- Prevent litigation through detailed consideration of potential conflict
Colorado Lawyers that Understand Business Partnership Problems
Under Colorado Partnership law, your rights and duties are based on your dual capacity as an agent of the partnership and as co-owner. As partnership law attorneys, we can educate you about your specific rights. Partners must act in good faith for the partnership and cannot take advantage over the other partners. Every person owes a duty of loyalty to the firm. Your duties therefore are as follows
- Duty of loyalty and good faith
- Obedience by virtue of the partnership agreement
- Must refrain from act in in a grossly negligent manner or intentional misconduct
Your rights as a co-owner in a Colorado business partnership are as follows:
- Participate in management
- Inspection of books
- Share of profits
- Compensation
- Repayment of loans
- Contribution and indemnity
What is a partnership?
A partnership is an association of two or more persons who carry on a business as co-owners for profits. There can be a contribution of money (a capital investment in the business project) or services in return for a share of the profits.
What are the different types of Colorado busines partnerships?
There are three types of Colorado partnerships — general partnerships, joint ventures, and limited partnerships. In a general partnership, the partners equally divide management responsibilities, as well as profits. Joint ventures are the same as general partnerships except that the partnership only exists for a specified period of time or for a specific project.
Colorado Limited partnerships consist of partners who maintain an active role in the management of the business, and those who just invest money and have a very limited role in management. These limited partners are essentially passive investors whose liability is limited to their initial investment. Limited partnerships have more formal requirements than the other two types of partnerships.
Do Colorado partnership agreements need to be in writing?
Colorado business partnerships are uniques relationships that don’t require a written partnership agreement. However, it’s always a good idea to have such a document. Because partners share profits equally in the absence of a written agreement, you could run into situations where you feel that you’re doing all of the work, but your partner is still getting half of the profits. It’s always smart to cover major issues related to your business in writing
What’s the difference between a partnership and forming a corporation?
The major difference is that in a partnership, creditors can sue you personally to repay business debts, whereas if you form a corporate entity, such as a limited liability company (LLC) or an S-corporation, the debt trail ends with the business.
In the example above, if you had formed an LLC instead of a partnership, your personal assets would be safe from creditors of the business. In legal parlance, creditors cannot “pierce the corporate veil”, meaning the formation of the corporate entity forms a protective shield around your personal assets. It’s a major advantage of forming an LLC, but LLCs also require more paperwork and money to register, start up, and maintain. Have one of our Denver business partnership lawyers assist you with any concerns in this area. Call us at 720-941-7200.
Colorado Adopts Revised Uniform Partnership Act
In 1997, Colorado adopted the Revised Uniform Partnership Act. The act governs general partnerships and limited liability partnerships that operate in Colorado. Under the Revised Uniform Partnership Act, the partnership agreement exists as the company’s governing document in terms of financial considerations and the management of the company. When the partnership agreement does not provide a necessary provision, the general partnership becomes subject to statutes in the Revised Uniform Partnership Act. Contact one of our Denver lawyers for assistance with resolving potential or actual problems.
Liability
Colorado partners in a general partnership have a personal responsibility to pay the company’s debts and obligations. If the company lacks the assets necessary to pay off a creditor, the creditor can go after a partner’s home, car and other personal valuables to recover the business debt. A partner that leaves without giving the partnership proper notice still has personal liability for company debts and liabilities. However, a partner that has his interest in the company bought out does not have personal liability for company debts that occur after his dissociation from the business. Partners found in breach of the company’s partnership agreement have personal liability to the partnership for any damages caused by the breach.
Understand Your Rights to Profits and Management
Each partner in a Colorado business partnership has a right to participate in the management of the business. The partnership agreement establishes the duties and responsibilities of each partner in terms of managing the company. In addition, the partnership agreement details how the partners of the business divide the company’s profits and losses. If the partnership agreement does not provide details regarding profit allocation, the general partnership has to divide profits according to the Revised Uniform Partnership Act. This means that the partners have to divide profits and losses according to their contribution to the business. This is a common problem.
Understand Partnership Control and Fiduciary Duties
Many people do not recognize that partnerships are much like a marriage, with the same fiduciary duties that spouses have toward each other. Thus, those in control must honestly account for income and expenses and not take advantage of minority partners not involved in the day to day operation of a business or real estate project. Strict procedures must be followed to dissolve a Colorado partnership and to resolve disputes with a troublesome partner. This is part of our commercial litigation practice. Failure to comply with these rules and improperly terminating a partnership can lead to liability. Watson & Associates can navigate you through the minefields of partnership law. If you have made mistakes before hiring Watson & Associates, the law firm’s Denver attorneys spare no effort to lead you out of the traps they have made.
Colorado Partnership dispute law is often complicated and requires a detailed accounting to understand the nature of the dispute at issue. Because of Watson & Associates’ experience in handling partnership matters, the Denver law firm has access to respected accounting professionals and other resources to help resolve partnership disputes favorably for its clients. Moreover, because of our civil litigation and commercial law skill in the courtroom, our Colorado lawyers know how to present partnership disputes in a way jurors understand so they can reach an appropriate verdict.
Partnership disputes often have a strong degree of personal animosity among the litigants leading to an escalation of litigation. We recognize the personal nature of these disputes and does its best to divert the litigants from the personal issues driving them apart back to the Colorado business issues that must be resolved to end a lawsuit.
Additional Information
On May 14, 2009 Governor Ritter signed changes to the Colorado General and Limited Partnership Acts allowing for”partners” in Colorado partnerships who do not have an economic interest or investment. House Bill 1248 added language to both the Colorado Limited Partnership Act and the Colorado General Partnership Act expressly authorizing the admittance of partners who do not make an investment, and who do not share in the profits, losses or distributions of the partnership. This new class of “non-economic partner” will allow such “partners” to have all the rights, duties and liabilities of a partner in a partnership, while being paid solely as an employee. For example, a professional partnership could have two levels of partners (1) traditional partners (2) and non-economic partners who are paid a salary, do not receive allocation of profits, losses and distributions, but are nevertheless partners in the firm.
Contact Watson & Associates
To speak with a Denver, Colorado lawyer at Watson & Associates about a partnership dispute, call (720) 941-7200 or toll free (866) 601-5518, or contact the firm online.
Attorneys: Joanne Rupprecht Idris Keith
Alternate: Theodore Watson John Dougherty
Statewide Representation
Our Colorado business partnership attorneys represent clients in Aurora, Broomfield, Centennial, Commerce City, Cherry Creek, Cherry Hills, Littleton, Parker, Lakewood, Thornton, Englewood, Bennett, Greeley, Colorado Springs, Adams County, Alamosa, Arapahoe County, Boulder County, Broomfield, Denver County, Douglas County, Jefferson County, Larimer County, Summit County, and Teller County.
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