Re: Sole Proprietorship?

Although it's better to have one, the absence of a written partnership agreement doesn't mean you don't have a partnership. What you already have in writing could be considered such an agreement if it divides up "shares". You would be wise to have a more comprehensive agreement drawn up, especially if you are concerned about future conflicts with your manager.

Re: Sole Proprietorship?

Your question requires some further information. Generally a

partnership has no formal filing requirements. Essentially any

association of two or more persons, acting as co-owners, engaging in

a business for profit can form a partnership.

Is this a wise decision? NO. For reasons such as: potential triggering of

personal tax issues, inability to function as a business entity (loans, etc.),

liability of limited partners being assessed as a general partner, allocation

of profits and losses, obligation and responsibilities, rights over contribution,

withdraw or retirement of an interest, and the rights of the entity itself with

respect to any third party claim, interest or action.

Maryland generally adopts the UPA with the 1997 amendments; however, interestingly a case is now

under review, i.e., Ratta et al. v. Larkin et al., where the issue involves whether the

dissolution of a limited partnership is based on

the UPA or the Revised UPA.

A partnership can be founded without a contract or agreement. But this is ill advised as indicated above.

Where a limited partnership is not set forth formally a general partnership may be found to exist. This can cause

significant problems for a person or entity claiming to be a limited partner.

You should contact an attorney. Other forms of business ownership may be appropriate to your business.

Re: Sole Proprietorship?

Both Mr. Sher and Mr. Holthaus are correct in their responses. I would add an emphatic "run, do not walk" to your attorney for advice on how to proceed. At my firm, which has just under 30 attorneys, we have some lawyers who spend their time assisting people like yourself. My own role is that of a litigator. If you fail to find counsel now, such as the corporate attorneys in my office, Mr. Sher, Mr. Holthaus, or someone else, you will very likely eventually pay a litigator like myself to fight with your manager

I understand that it can be difficult to confront your partner with the fact that you insist on having a formal business arrangement. Moreover, there can be no good reason for your partner to be resistant to the idea or the process of formalizing your business arrangement properly -- and if he is, then you should be very alert and even more interested in clarifying (or perhaps even ending) your relationship.

I also understand that you may not want to spend the money on attorneys.

However, this is literally one of those "ounce of prevention" things that we all face in life.

The cost that you will face if you do not take care of this now can be much higher later -- either by means of a business stolen or harmed by a former partner, or in terms of the expense and disruptions of active litigation.

I would be happy to chat about how to avoid the horror stories that I know only too well as a litgator, and to introduce you to some of our corporate attorneys. In any event, please do see someone soon.

I wish you well.

Lawrence R. Holzman, Esquire

Joseph, Greenwald & Laake, P.A.

6404 Ivy Lane, Suite 400

Greenbelt, MD 20770

(240) 553-1199

fax (301) 220-1214

Disclaimer: Please note that the posting of this response is not intended to constitute legal advice. You should contact an attorney to obtain information applicable to your situation. This posting is not confidential or privileged and does not create an attorney/client relationship.