Structuring a partnership agreement in Florida

[Christopher Kolasa]

My partner and I began our Florida LLC business partnership at the end of 2019 to purchase a rental investment property and we utilized an online partnership template to create a partnership agreement. Is this sufficient?

Recently, during discussions with my asset protection attorney, upon their quick review of our partnership agreement, the agreement appeared very weak and I was told to investigate the soundness of our partnership structure further with a Florida attorney who may have more hands-on experience with this sort of matter.

Has anyone had experience with structuring a partnership agreement, are the online templates weak? Should I hire an attorney? The few I've talked to have had very high fees, looking for a cost effective solution because going through the process myself, I can imagine the process can be fairly routine for an attorney.

Thanks.

[Greg O'Brien]

@Christopher Kolasa its worth the investment IMO. I’ve seen partners, actually brothers, end up in court years later because of a break up and a “template” agreement that wasn’t even executed correctly.

There should/could also be a buy/sell agreement as well to avoid future buy out issues. Check with your CPA who may work with a good biz attorney. We routinely have our partnerships work with our attorneys to get things structured properly and efficiently. Should be $2k + or so for both of these from a reputable attorney from my experience, but varies by market

[Christopher Kolasa]

Thank you @Greg O'Brien - I am adamantly looking for any attorney around Orange Florida to assist with this in that case. Maybe I'll inquire with some CPA's as well. Appreciate the insights. You think it's possible to do for a couple hundred bucks if it's an hourly kind of job?

[Greg O'Brien]

@Christopher Kolasa possibly, dont know that market well. If you approach it and tell them specifically what you believe needs to be fixed or reviewed, should keep your costs down

[Basit Siddiqi]

@Christopher Kolasa

"online templates" are general and maybe a good starting point for you to draft your agreement but it definitely needs to be amended to fit your needs/business.

Some of the items to include in your operating agreement
1) Responsibilities of each partner
2) profit/loss split for each partner
3) What if scenarios...I.E. what if partner A dies?
4) When will the partnership cease
5) etc

Just a reminder for yourself since you have a multi-member LLC, you will need to file a partnership return on an annual basis. They are normally due March 15 of every year for Calendar year filers.

Good luck!

[Christopher Kolasa]

Originally posted by @Basit Siddiqi:

@Christopher Kolasa

Some of the items to include in your operating agreement
1) Responsibilities of each partner
2) profit/loss split for each partner
3) What if scenarios...I.E. what if partner A dies?
4) When will the partnership cease

These were all addressed in the agreement, I am just wondering why the attorney mentioned the agreement was weak. Thanks for the reminder.