Partnership Agreement

UPDATED: Oct 1, 2022

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Partnership Agreement

I currently have an LLC and wish to invest money in to an established business
that has it’s own domestic corporation. Should we file a partnership with the
state, and if so what type? There is talks of signing a service contract instead.
Is this a better option

Asked on April 3, 2018 under Business Law, Nevada


SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 4 years ago | Contributor

There is no right answer: it depends on what you want to do.
1) Do you want to be an owner of the company? Buy its stock, either in your own name or have the LLC buy it.
2) Do you want to do joint venture? You and they set up a new business (e.g. corporation) that both existing businesses invest in, own, and run.
3) Do you want to provide goods or services to them? Contract to do that.
4) Do you want to make money from them without being an owner, and in a way that is more guaranteed (less risk) but also less upside potential? Loan them money with a written loan agreement that spells out interest rate and repayement schedule, and get some security interest (such as in their property, equipment, inventory, or accounts receivable) to protect you.
Figure out what you (and they) want to do, then meet with a business attorney to figure out how to best effect that.

IMPORTANT NOTICE: The Answer(s) provided above are for general information only. The attorney providing the answer was not serving as the attorney for the person submitting the question or in any attorney-client relationship with such person. Laws may vary from state to state, and sometimes change. Tiny variations in the facts, or a fact not set forth in a question, often can change a legal outcome or an attorney's conclusion. Although has verified the attorney was admitted to practice law in at least one jurisdiction, he or she may not be authorized to practice law in the jurisdiction referred to in the question, nor is he or she necessarily experienced in the area of the law involved. Unlike the information in the Answer(s) above, upon which you should NOT rely, for personal advice you can rely upon we suggest you retain an attorney to represent you.

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