to Your Ranch Business?
owns 50 percent, and with 3 part- ners each owns one-third, and so on.
Do you need a lawyer to help you
set up a partnership? Technically, no, but you would be foolish to do so without the advice and help of your lawyer. The advantages are that the part-
ners make business decisions jointly and share the profi ts in proportion to their ownership interests. If one partner dies, the partnership ends. If any partner fi les bankruptcy, the partnership ends. Disadvantages are that each partner is liable for
tscra.org
all the debts of the partnership. The partner paying the debts by himself can receive “contribution” from the other partners in propor- tion to their ownership interests, but that assumes those other partners have the money to pay their share. Any one partner can also bind the whole partnership, which can be good or bad, depending upon what the agreement is. There is another type of partner-
ship called a limited partnership. There must be at least 1 general or regular partner who would be liable for the debts of the business. This
requires a written agreement and normally must be recorded with the county recorder. The reason for the recording re-
quirement is to put the public on notice that the other (or limited) partners are only liable to third parties for the money the limited partners have invested in the busi- ness. Their liability is limited and that is why they are called limited partners. Limited partners cannot take part in any of the business decisions — if they do, then they become general partners and are liable for the business debts. MORE
March 2014 The Cattleman 81
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