Forming a Limited Partnership (LP) is Colorado requires some understanding of Colorado business laws and how they impact your business entity. New business partnerships quickly find themselves in heated disputes about how the company should operate, each person’s responsibility to each other and the business.
Due to the lack of knowledge, unnecessary litigation arises. In addition, business owners mistakenly apply the LLC documentation as the same for a Colorado limited partnershi[. Starting a Colorado LLC requires a different approach than forming a limited partnership.
Although both can be considered partnerships, the required documentation, and daily business contracts can be different. Having the right documents in place, and having partners understanding their legal obligations to the business partnership and corporations’ members, can minimize litigation and LP partnership disputes.
The Denver business corporations lawyers at Watson & Associates, LLC provide comprehensive business law services to newly-formed corporations and limited partnerships throughout Colorado. We provide:
- Business consulting services;
- Drafting partnership agreements and operating agreements;
- Contract law and contract drafting
- Limited partnership business formation services;
- Starting an LLC in Colorado
- Partnership law and litigation services.
- Articles of Incorporation and bylaws
What is a Limited Partnership (LP)?
Limited liability partnerships and limited partnerships have more than one owner. The legal definition allows for a “silent partner” and another partner who runs the day-to-day operation. A Limited Partnership affords owners some level of limited personal liability for business debts and liabilities.
In an LP business setting, at least one owner is considered a general partner. He or she makes the day-to-day business decisions and is held personally liable for corporate debts. Limited partners, on the other hand, are not personally liable for business debts.
Corporations Advantage of Forming an LP
When companies incorporate, they are some advantages of deciding on forming partnership business. They include:
- Personal liability and asset protection: The corporate business partnership structure offers personal liability protection up to investment amounts of the LP partners.
- Pass-through taxation: The IRS does not tax an LP’s business revenues at the corporate business level. Profits and losses are “passed through” to each individual partner’s tax returns.
- General partner management and control: The LP’s general partner has complete management control of the business operations.
What is a Limited Liability Company in Colorado (LLC)?
A limited liability company (LLC), another form of a limited partnership, in Colorado is governed by Colorado LLC laws and formed through the Secretary of State. This unique type of business entity allows for special privileges such as pass-through taxation, personal liability protection, and does not require dissolution if adding other partners.
When deciding what business entity best suits you, be mindful that there are certain types of businesses that cannot form a Limited Liability Company. This includes business organizations offering professional services (lawyers, doctors etc.)
At Watson & Associates, LLC our Denver limited partnership lawyers help you to navigate through the various Colorado partnership laws, draft a sound partnership agreement and operating agreement for your company. We also provide legal advice about partnership disputes and offer business litigation services.
Statewide Corporate & Limited Partnership Attorney Services
Watson & Associates’ Colorado business partnership attorneys Denver offer dispute resolution and legal advice to small businesses throughout the state. Our small business lawyers help limited partnership business owners in virtually all areas including Aurora, Aspen, Broomfield, Bennett, Commerce City, Denver County, Englewood, Franktown, Golden, Lakewood, Thornton, Boulder County, Colorado Springs, Arapahoe County, Broomfield County, Jefferson County and Adams County. Contact an experienced Colorado limited partnership attorney for immediate help.
Call a Denver Colorado Limited Partnership Lawyer
For immediate help forming your limited partnership in Colorado, call Watson’s Denver business lawyers at 720-941-7200. We offer a FREE initial consultation.