Call Our Denver Partnership Lawyers for a Free Initial Consultation at 720-941-7200.
Avoid the Five Most Deadly Mistakes Facing Colorado Business Partners and How Knowing What Those DANGERS are Can Help to Minimize Costly Litigation Fees While Increasing Profits.
Partnership law is an area of business law that many Colorado businesses find themselves facing litigation. Learning your rights and responsibilities can save you thousands or millions in litigation cost. You can also protect yourself against personal liability and breach of fiduciary duty lawsuits if have you have the right information.
Colorado business partnerships are consistently growing because of the leverage of having two or more partners to contribute to the growth of the corporation. However, a business can succeed or fail depending upon the actions of each business partner. Disagreements and failure to draft a concise partnership agreement are among the top reasons why business partnerships fail. Oftentimes, when a dispute arises, you find yourself without protection. Avoid this crippling dilemma at call costs.
Do you understand your rights and obligations under Colorado partnership law?
Do you know your obligations to the business and other partners under Colorado laws?
Do you have a partnership agreement that protects your rights in the future?
Colorado partnership law can pin you into a partnership without you having a written agreement.
Colorado partnership laws recognize the actions of two or more persons conducting business for a profit. In other words you can be served papers from another person whether or not you have a partnership agreement in place. Knowing this should prompt you to get one in place of seek legal advice from a business law attorney. You may be currently in a partnership and don’t know it.
Do not call someone else your business partner. You may be legally stuck with it under Colorado partnership law. Many people unconsciously refer to themselves, or another, as business partners. This can hurt you in a lawsuit for breach of fiduciary duty or when the other ‘partner’ claims that he or she is entitled to profits.
Avoid Personal Liability: From day one you should form the business partnership with the Colorado Secretary of State. Without this critical step you may open yourself to personal liability. This means that creditors can come after your personal assets. Business 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.
Get Proper Partnership Agreement in Place: Without a detailed partnership agreement in place, you are opening yourself to litigation and disputes. Colorado business litigation attorneys are expensive and you want to be proactive and get your documents in place at the beginning. Colorado business partnerships are unique relationships that do not require a written partnership agreement. However, it is always a good idea to create a document that details the responsibilities of each business partner.
Know Your Rights as a Business Partner: Under Colorado Partnership law, your rights and duties are based on your dual capacity as an agent of the partnership and as co-owner. You must understand your rights or become exposed to litigation by creditors, consumers and other third parties. Learn what the other partner’s obligations are to you and the company.
Legal Help Including Mediation and Litigation: Unfortunately now all disputes can be resolved internally. Business partnerships often end up in deadlocked situations. When this happens, you want a Colorado business partnership law lawyer that understands how the litigation process works. If you need guidance through mediation, a business lawyer can explain the process.
Do You Know The Difference Between The Various Types of Colorado Business Partnerships?
The three types of Colorado partnerships include 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.
What Are Your Rights in Management and Profits?
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.
What Are Your Business Control Rights and Fiduciary Duty Obligations?
Many people do not recognize that partnerships are much like a marriage with the same fiduciary duties that spouses owe 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.
What Can Our Denver Business Partnership Lawyers Do to Help You?
With over a decade of working with business partnerships and corporations across the country and in Colorado, the business partnership law attorneys at Watson & Associates, LLC continue to work with small businesses and large corporations to apply proactive measures that reduce disputes and litigation among partners. If partners do not understand their rights or consistently are in dispute, then the entire business fails.
We can help:
- Avoid common pitfalls with personal liability and exposure resulting from statutory non-compliance.
- Educate owners about their rights under Colorado Partnership Law.
- Cost-effectively litigate partnership disputes when relationships go sour.
- Build your credibility and trust with your customers and help you make sound legal decisions in corporate contracts.
Outside Counsel Services: Not all businesses in Colorado can afford to hire in-house lawyers. However, you may need immediate access to a lawyer as situations or questions arise. Watson & Associates can serve as your outside counsel for business matters. This way you are protected and sleep well knowing that you have access to counsel.
Call Our Denver business partnership law attorneys for a confidential free initial consultation at 720-941-7200.
Because of Watson & Associates’ experience in handling partnership matters, the Denver partnership 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 skills 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 will work to divert the litigants from the personal issues driving them a part back to the Colorado business issues that must be resolved to end a lawsuit.
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.