A partnership can be created by circumstances that don’t include an actual written agreement. People can become unintended partners, and then they can also be personally liable for damages resulting from their partner’s activity.
Lee recommends three steps to avoid unintended partnerships. One, identify all potential relationships that could lead someone to believe that a partnership exists. Two, create one or more LLCs to limit liability. Third, have all people who may be considered partners enter into a written agreement.
Every person who is a partner with anyone else in an activity can typically be personally liable for damages resulting from the activity. For instance, if two siblings are partners in a farming operation, and one of the siblings causes a farm accident, the other sibling can be just as legally liable for the accident as the sibling who actually caused the accident.
Therefore, people who might have otherwise been partners may instead co-own an LLC as “members.” When one member of an LLC causes an accident within the scope of the LLC’s activities, the other member personally will not generally be liable for that accident.
Read more about how to avoid being unintended partners in Lee’s article in the Lima News here: Legal-Ease: Avoid being unintended partners
Source: LimaOhio.com, “Legal-Ease: Avoid being unintended partners,” by Lee R. Schroeder, May 12, 2018
Lee R. Schroeder is an Ohio licensed attorney at Schroeder Law LLC in Putnam County. He limits his practice to business, real estate, estate planning and agriculture issues in northwest Ohio. He can be reached at Lee@LeeSchroeder.com or at 419-659-2058. This article is not intended to serve as legal advice, and specific advice should be sought from the licensed attorney of your choice based upon the specific facts and circumstances that you face.