What are the different partnership structures in Oregon?
This article looks at three different types of partnership structures that are available in Oregon.
A good way to minimize some of the risk of starting a new business, while also potentially raising more capital, is to form a partnership with one or more business partners. While essentially any business that has more than one owner is defined as a partnership, there are different types of partnerships available to entrepreneurs in Oregon. Below is a look at a few of the most important ones and who they may most benefit.
The most basic: General partnerships
A general partnership is the simplest and most straightforward type of partnership. In a general partnership all duties, liabilities, profits, and so on are typically split equally between all the partners. In fact, there is no need to register as a partnership (unless it operates under an assumed name) or to have a partnership agreement. So long as a business operates like a partnership then legally speaking it is considered a partnership. However, given that, according to the Small Business Administration, about one-third of small businesses don’t survive their first two years, it is always a good idea to have a partnership agreement in place.
A little more complicated: Limited partnerships
A limited partnership is slightly more complicated than a general partnership. In a limited partnership there is at least one general partner and one limited partner. As the website for the Secretary of State of Oregon points out, a limited partner acts more like a shareholder in the business, whereas the general partner has control over the business and assumes liability for its debts. This structure is useful for business owners who want to bring in investors but maintain day-to-day control over their business. Limited partnerships must be registered and they should operate according to a partnership agreement.
For professionals: Limited liability partnerships
Finally, a limited liability partnership (LLP), which is not to be confused with a limited partnership, is a type of business structure available to certain professionals as defined by ORS Chapter 67. Typically, most professionals who require a license to operate, such as architects, engineers, psychologists, lawyers, dentists, and so on, qualify to be structured as a limited liability partnership. A limited liability partnership has the advantage of limiting the liability exposure of the partners in the business, meaning that if the business is subject to litigation then the individual partners’ personal assets will largely be shielded.
Business law help
Starting a new business in Oregon is both exciting and challenging. One way of taking off some of the stress and ensuring the process goes more smoothly is by consulting with an experienced business and corporate law firm early on. With knowledgeable legal counsel on hand, new business owners will be able to meet their legal and regulatory requirements so that they can focus more of their energy on making their new enterprise a success.