The partnership agreement, AKA an operating agreement, is a term that has many meanings. Those meanings based on the type of Texas business entity that is created and referenced in the document. The partnership agreement is a key part of maintaining a healthy and vibrant company. Here we will summarize what the agreement means for two different business entities in the course of Texas law and procedure.
In the terms of a general partnership, a partnership agreement is an agreement. The agreement between the partners of the organization and used to dictate their dealings with one another. While partnerships may be formed with or without filing with the state, a partnership agreement is always a good course to take. It indicates the distributions of leadership, ownership, profit sharing, and loss sharing. Most importantly, it dictates how liability is to be distributed. This is key, as liability happens if the partnership gets sued or their is an accident where it is liable.
In terms of a limited liability company (LLC), an operating agreement is the same as a partnership agreement. It is designed to do the same as above, but for the course of dealings for the LLC and the members of the LLC. In business terms, partnership agreement and operating agreement are often times interchanged, but they are distinct in how they function for each type of company. But both should be considered even before either company is formed.
Need help on an operating agreement? You need to find an experienced attorney willing to sit down and go over the document, forming it for your company. As always, you do not need to necessarily call us, but please seek out competent counsel.
Contact us HERE for more information and to speak with an attorney about your options when developing your business. The above does not constitute legal advice nor create an attorney client privilege. It is merely meant for entertainment purposes and general information.