McBride Law Blog


Category Archives: Personal Liability

Can Others Hold Me Liable as a Partner, When I Am Not a Partner? (Part I)

August 25, 2017

This blog will discuss the challenges of Partnership by Estoppel.

Partner refers to a variety of business relationships such as co-owners, collaborators, coworkers, business associates, and even suppliers and customers, etc.  We explained in our previous blog on general partnership, it is not the label, but the intent to do what in law creates a partnership (agreement to share profits, right to participate in the control of the business, etc.), that controls the question of whether there is a general partnership. … Read the rest

General Partnerships Part IV: Relationship Between Partners

August 21, 2017

Partners in a general partnership owe a fiduciary duty to the partnership, just like in the context of LLCs.  Partners must act as an ordinarily prudent person, refraining from competing with the partnership, and generally act in good faith.  Moreover, they must put the best interests of the partnership ahead of their own.  So, in the farming partnership case from the previous blogs, the parties owe fiduciary duties to the partnership, which they would not otherwise owe if it was just a farming agreement. … Read the rest

General Partnerships Part III: Liability of Partners

August 18, 2017

Generally, partners are jointly and severally liable, and each partner is personally and individually liable for the full amount of all partnership obligations.  For example, in the farming partnership case we discussed in our previous post, each partner would be liable to any person with a claim against the partnership. For example, if the supplier sues the partnership – each individual partner would be liable if the partnership fails to pay the supplier. Whether they intended to be a partner or not or whether they knew they were exposed to such liability, they are each a partner in a general partnership.Read the rest

General Partnerships Part II: Formation of a General Partnership

August 17, 2017

In the previous post of this series, we talked about general partnership and one of their most fearful characteristics.  So if general partnerships exist, how do courts and others know?

Statutes often state that a partnership is an association of two or more persons to carry on as co-owners of a business for profit whether or not it was intended.  Unlike other business entities such as LLC or corporations, which require the filing of certain forms with the secretary of state, no formalities are required to form a general partnership. … Read the rest

Why Is It Important for Business Owners To Know About a General Partnership?

August 16, 2017

What is a General Partnership? For example, two brothers agree to invest in several tracts of real property to make some money.  One brother who was an engineer and used his engineering skills to increase the value of the properties; the other brother was responsible for obtaining the title and paying taxes using his skills in marketing and administrative services. But they did not use a written agreement.  Later, someone is injured on the property.  Which brother is liable for any costs?… Read the rest

Investors May Not Be Protected: Investors Need Counsel Too

August 14, 2017

I want to talk about something that’s very serious out there, not often talked about, but it’s underappreciated. Investors, if you’re investing in a company, you need a lawyer too. Why? Because you don’t know how those documents are prepared. Those documents were likely prepared by the company and/or its lawyers. And who are they looking out for? They’re looking out for them. They’re looking at what’s best for their interest.

A lot of times I have clients that are investors.… Read the rest

When To Set Up Entities

June 15, 2017

It’s often a common question that clients ask us when do we need to set up legal entities? When are we okay going without a legal entity and when should we set up an entity? Here’s a few rules and red flags to look for that might indicate that it’s time for you to set up an entity.

# 1 You have multiple people involved. If you have more than one person involved in your business, you’re probably going to want to set up an entity.… Read the rest

Was Your Company Properly Formed? Do You Have Hidden Liability Risks?

June 2, 2017

R. Shawn McBride recently spoke about protecting you from liability. Here is the transcript:

Hi folks, it’s Shawn here with you asking a tough question. Is your company giving you the liability protection that you think it is? Unfortunately, for a lot of people, the answer is no. So we’ve talked a little bit in our blogs if you go to and, we’ve talked a bit about liability protection. And obviously that’s one of the primary reasons a lot of people form an LLC or a corporation is you wanna protect your assets.… Read the rest

All postings are intended to be planning tools to familiarize readers with some of the high-level issues discussed therein. No posting is intended to be a comprehensive discussion and additional details should be discussed with your transaction planners including attorneys, accountants, consultants, bankers and other business planners who can provide advice for your circumstances. This article should not be treated as legal advice to any person or entity.