Getting involved in commercial real estate offers many benefits, including the possibility of a large profit. Many people choose to form partnerships when entering the commercial real estate market for multiple reasons. Entering the commercial real estate market through a partnership means a lower barrier to entry and the benefit of two separately knowledgeable minds earning a profit. It helps mitigate risk while reducing expenses and still generating revenue.
Forming a commercial real estate partnership also means you should consider involving an experienced commercial real estate partnership lawyer to protect your interests and the interest of your business. While it may sound a little confusing, it’s just good business sense. Here are several ways a commercial real estate partnership lawyer can help you with your venture.
Forming an LLC
Most commercial real estate partnerships choose to form an LLC for its characteristics and tax advantages. While you can form an LLC in many states without an attorney, it isn’t recommended. If you are working within a partnership, an attorney is necessary to ensure the documents are filed correctly, and the company is adequately formed as an LLC.
Furthermore, many commercial real estate partnerships operate in multiple states. Working with the right attorney can help ensure that your LLC is formed in the best state that offers the most advantages for your company. Your commercial real estate partnership attorney will help ensure your LLC is compliant with state and local laws in the states where you decide to do business.
Using an attorney to formulate your business structure will also help ensure everyone’s interests are properly represented. It is important to spread liability and equity appropriately based on each partner’s contributions. You can also agree up front as to how the business should be operated and include those decisions in the original partnership agreement.
When your partnership starts making money and building equity, each partner will want their fair share, and understandably so. Not all partnerships are half and half. Many commercial real estate partnerships are formed based on what each partner can offer the company. One partner may have a large network of potential tenants, while another may be able to secure a large amount of financing.
A commercial real estate partnership attorney can help ensure each partner gets the amount of equity that represents their contribution to the partnership. This is usually not something that happens just one time. It is often an ongoing process. Many times, there are changes to a partnership that require changes to the articles of organization as well as the way equity is distributed.
If disagreements arise, a commercial real estate partnership attorney can usually settle them amicably based on stipulations in the original partnership contract and state laws. Equity may be distributed as a cash payment or in many other forms, and the right specialized attorney can help get it done appropriately.
Maintaining Accurate Records
Running a commercial real estate partnership means keeping very accurate records. Accurate records are necessary to maintain compliance for the LLC in the face of ever-changing state and federal laws. Constantly changing regulations can make compliance difficult for the layperson who may not be familiar with the letter of the law.
In the event of an audit, accurate records are an absolute necessity. Not only do business records account for business dealings but they can also show clear motives and strict compliance with industry regulations. They are also extremely helpful when it comes time to file taxes. Detailed accurate records help ensure the business and its partners get to take advantage of every tax break they qualify for.
Unfortunately, some situations may arise where a lawsuit is filed either against the partnership itself or even between the partners who have a disagreement. Working with a commercial real estate partnership lawyer can protect the business interests in these special situations. They can be very complex and often require the trained eye of an attorney to ensure everyone’s equity and interests are protected. Proper representation also helps protect the partners and the business from costly, frivolous lawsuits levied by unscrupulous individuals.
Contracts and Closing
Working with commercial real estate, especially as a business, means there are a lot of contracts. The business probably makes several offers annually to purchase new real estate, and counter offers may require a lot of back and forth between attorneys. It is best to have attorneys handle all aspects of contracts, including revisions, interpretations, and even acceptance.
When agreements are reached in commercial real estate, attorneys are often necessary for closings. While there are options in this field, it’s always best to work with an attorney you trust because you know they will always represent your business interests. Whether you are making an offer on a potential property, updating a contract, or closing on a new building, a commercial real estate partnership attorney can help.
Aside from just purchasing property, almost any move made in a commercial real estate business should be cemented in writing. This helps ensure that all partners agree on company decisions and that any move made is above board. It protects business interests by ensuring clear motives that truly benefit the business entity with the clear goal of making a profit.
Partner with a Commercial Real Estate Partnership Lawyer Today
If you are involved in a commercial real estate partnership or are considering forming one, then a specialized attorney can help protect your interests. They will ensure the business is formed properly and the articles of organization are appropriately filed. The right attorney will draw up a partnership contract that addresses most legal issues you and your partners are likely to encounter.
They will ensure your business is compliant with state laws while maintaining the accurate records necessary to protect the business from frivolous lawsuits. They can represent the business in the event of an audit or any other type of legality that may arise. If you want to ensure your business is formed properly and your equity is protected, then hire a commercial real estate partnership lawyer today.