Like LLC § 417 (a), the Partnership Act § 121-110 (a) provides that a limited partnership “shall have a written partnership agreement”. An oral contract is much more difficult to implement, as the parties probably disagree. Indeed, each party may have a completely different interpretation of the oral agreement, on the basis of the negotiations that lead to the creation of a company – negotiations and declarations that may have taken place years ago. However, oral agreements may be legally enforceable depending on the nature of the agreement. If there is a partnership contract, it is important that the official recipient receives a copy in order to determine the terms of the agreement between the partners. While business partnerships rarely begin to worry about a future partnership dispute or the dissolution of the business, these agreements can guide the process in the future, otherwise emotions could take over the superior agreement. A written and legally binding agreement serves as an enforceable document and not just an oral agreement between partners. Once an LLC has been duly created, its members have the advantage of limited liability and a member or officer is not liable for the acts, debts or obligations of the company. In other words, if a person signs a contract on behalf of an LLC that has not yet been created, that person may be personally liable for the contract. See Duray Development, LLC vs. Perrin, 288 Mich App 143 (2010). In duray Development, the Tribunal found that a company may be held liable if, after the company`s inception, it ratifies or accepts the contract, (2) a court finds that a de facto company existed at the time of the contract, or (3) orders a court to order that the company, by the effect of a legal action, prevented the consideration: against the existence of a company. Important findings: Business Partnership Agreements are legally binding documents that partners must respect throughout the life of the company at the beginning of their partnership.
If you have any problems or disputes regarding a business partnership, whether on the basis of an oral agreement or otherwise, you should call us today for the advice you need. Williams Mestaz, L.L.P., has the experience and knowledge to properly handle your case. Contact Williams Mestaz, L.L.P. . . .