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Is a general partnership part of your business formation plans?

Starting a new venture here in Georgia or elsewhere is often like learning to drive. You are eager just to get behind the wheel, but you must take numerous steps before actually doing so. One of the more important business formation steps is to choose the type of entity under which you wish to operate.

One of those choices is a general partnership. First, it is important to know that this type of entity does not provide you with any protections from the partnership's liabilities. This means that your personal assets are on the line. If you serve as the general partner, you will more than likely also be managing the business's day-to-day operations.

However, this does not mean that the other partners may not engage in activities on behalf of the business. In fact, your partner or partners may do so without your knowledge, permission or involvement. If something goes wrong, you remain personally liable for any mistakes that are made. This directly contrasts with a limited partnership in which only one person serves as the general partner and the others retain limited liability as long as they are not an active part of the business, which may also help protect the general partner.

These are just a few of the considerations of forming a general partnership. The type of entity you choose could have a significant effect on the success of your business, so this decision requires careful thought. If you have questions about this entity type and other business formation issues, you would more than likely benefit from discussing them with a Georgia attorney who regularly helps people like you as they branch out on their own.

Source: investopedia.com, "General Partnership", Accessed on July 22, 2017

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