NEW JERSEY FAMILY LIMITED PARTNERSHIP
 
$174.95
(INCLUDES NEW JERSEY STATE FILING FEES FOR 2 PARTNERS; ADDITIONAL PARTNERS ARE $25 EACH)

THANKS FOR INQUIRING!
 
Just think - you can form a Family Limited Partnership
right over the Phone, or Online. It's easy. It's quick.
And you'll save a substantial amount of money.

A limited partnership consists of a general partner that manages the day-to-day operations of the business and limited partners that are investors in the limited partnership. Typically, the individuals that are the general partners are different than the individuals that are the limited partners, but they need not be mutually exclusive.

A limited partnership permits passive investors to invest capital and share in the profits and losses of a partnership venture without being liable for more than their capital contribution. Those who will be active in the day-to-day operation of the limited partnership business, such as the general partner, however, must remain fully liable.

A Limited Partnership has flow-through tax treatment under Subchapter K of the Internal Revenue Code and therefore a Limited Partnership is not subject to direct taxation. Instead, the partners must report and assume liability for their share of the Limited Partnership's gain or loss. Avoiding the entity level tax ensures that income flowing into a Limited Partnership is taxed only once.

The limited partner generally is not liable for the general obligations of a Limited Partnership unless that partner is also a general partner or participates in the "control" of the Limited Partnership's business. The limited partnership statutes permit limited partners to take many common actions without being deemed to have participated in the control of the Limited Partnership business.

Family Limited Partnership

The Family Limited Partnership ("FLP") is a limited partnership where family members hold most or all of the ownership interest in a limited partnership, and it is an important vehicle for asset protection and estate planning. The FLP can be used to create a powerful strategy for asset protection and for realizing estate tax and income tax benefits.

The FLP can be formed so that a husband and wife are each general partners that handle the day to day operations of the family business or perhaps by a husband and an older son. Also, the FLP has limited partners that invest, perhaps only nominally, in the FLP. Typically, the husband, wife and children are the limited partners.

After forming the FLP, all family assets can be transferred into it, including investments and business interests. After the transfers, rather than such assets being owned individually by the husband and wife, etc., the husband and wife will own a controlling interest in a business entity that owns the assets. The family members that are general partners will have complete management and control over the affairs of the partnership and can buy or sell any assets they wish on behalf of the FLP. Furthermore, as general partners the family members can decide to distribute the proceeds from the sale of the assets or for the FLP to keep such proceeds.

Asset Protection from Creditors

An important feature of the FLP is asset protection. If an individual is sued and the plaintiff gets a judgment against the defendant, the plaintiff/judgment creditor can seize everything owned by the defendant/debtor. If a husband and wife plan wisely and are partners in an FLP where all they transferred their formerly personal assets to the FLP, the only asset individually owned is the interest in the FLP. Such a creditor cannot reach into the FLP and seize the investments and bank accounts of the FLP. The creditor has no rights to any property held by the FLP. Since title to the assets is in the name of the FLP and it is an individual that is a partner rather than the partnership itself which is liable for the debt, the partnership assets may not be taken to satisfy the judgment.

A creditor may apply to a court for a charging order against an individual partner's partnership interest. When this happens, in the event of an FLP distribution, instead of the money going to the individual partner, the money goes to the judgment creditor until the amount of the judgment is satisfied. Cash distributions paid to the partner/debtor could, therefore, be taken by the creditor. This doesn't mean that the judgment creditor is a partner in FLP, it means the judgment creditor receives the right to any distributions paid to an individual partner/debtor.

The way to forestall such a scenario where a creditor has obtained a charging order is that the FLP should have provisions in its partnership agreement preventing distributions to the debtor partner. Since the partnership would not have any distributions, the judgment creditor won't get paid, at least not from that collection method. Instead, the FLP would retain its funds and continue to invest and reinvest its money.

The Family Limited Partnership is an excellent vehicle for holding interests in other business entities. Because you want to protect your valuable family assets from creditors, you do not want the FLP to actively conduct business, as this will expose such valuable family assets to litigation. Instead, you want the FLP to own shares of corporate stock or membership interests in limited liability companies ("LLCs"). Such corporations or LLCs in turn will hold individual investment properties or conduct business with a specific business purpose. In this way, exposure to liability is isolated where litigation concerning one of your businesses will not jeopardize the other businesses and the assets they hold.

Tax Benefits

The FLP has tremendous flexibility. To that end, with family assets held by an FLP, it may be possible to obtain income tax savings by spreading income from high tax bracket parents to lower tax bracket children and grandchildren who are fourteen years or older.

The FLP can also be a vehicle for dramatically reducing or eliminating estate taxes by shifting the value of your assets out of your estate without any loss of control through a program of gifting limited partnership interests to your children or other family members. This is done with an estate plan including an FLP established to hold all of your family assets. Say for example you and your wife are general partners of the FLP. As such, you would have management and control over your property in the FLP. Initially, you could make a gift of the FLP interests to your children in an amount equal in value to the combined maximum estate tax credit (currently $2 million). Later, you could gift limited partnership interests equal to the amount of the annual gift tax exclusion of $22,000 per child ($66,000 per year).

The value of each gift of a limited partnership interest may be discounted in order to account for the lack of marketability and the lack of control associated with those interests. Instead, because the FLP interest cannot be readily sold and because the donee has no right to participate in management of the FLP, many financial advisors recommend discounting the transferred interest to reflect its true market value. Depending on the situation and estate planning aggressiveness discounts in the range of 30 to 50 percent may reduce the estate tax burden.

FLPs versus Family-Owned Dual Class LLCs

Generally speaking, a family-owned Dual Class LLC may achieve the same results as an FLP, insofar as multiple-member LLCs can be taxed as a partnership and the management and investment aspects can be isolated the same way as with an FLP. Also, instead of the general partner of the FLP either being exposed to liability (if a plain vanilla limited partnership, rather than a limited liability limited partnership) or facing the expense of forming a corporation or other entity that intrinsically has limited liability, all managing members will have their liability limited to the extent of the capital they have contributed in exchange for their equity interest. Furthermore, the Family Owned Dual Class LLC is considerably less expensive than the FLP. Finally, the Family Owned Dual Class LLC is extremely flexible, as it can be taxed as a partnership or a corporation, depending on what the members elect. However, it should be noted that because limited partnerships have been around for years, court cases involving limited partnerships allow planning to be more certain compared to the dearth of guidance for LLCs in general and Dual Class LLCs in particular. Thus, you will want to carefully analyze your situation and seek guidance from an attorney or other estate planning professional for the entity that best fits your family business situation.

Formalities Are a Must

Please be advised that in order to fully realize the asset protection and estate planning potential of FLPs, it is essential that all business formalities are followed and documented as if the FLP is a completely independent entity and that there are no family relationships involved, as courts and the Internal Revenue Service will carefully scrutinize the dealings of the FLP in order to disallow the tax benefits claimed by the partners of the FLP (see Kimbell v. U.S.A., Case No. 03-10529 (May 20, 2004 )). This means that all the financial and business records should be carefully maintained, that funds are not commingled, that any and all agreements are carefully drafted, that real property and other assets should be treated as FLP assets rather than personal assets, that transactions should be carefully documented and bona fide rather than disguised gifts or sham transactions, that any price paid for in a FLP transaction is fair market value, that any transaction have a valid business purpose such as asset protection or continuity of family ownership rather than tax avoidance and that appraisals used to claim a valuation discount are adequately substantiated.

Careful drafting of FLP documents is crucial, and the partnership agreement of the FLP must contain certain key provisions designed to protect your valuable family assets from creditors of individual partners and that family members maintain control over the FLP.

In order for the Firm to process your Family Limited Partnership, you will need a Limited Partnership Agreement prepared by our Firm or, if you already have a Limited Partnership Agreement, you will need to furnish our Firm an opinion letter from qualified independent legal counsel representing the proposed Family Limited Partnership stating counsel has reviewed the Limited Partnership Agreement and such Agreement is fully compliant with California law and represents the business entity contemplated by the parties.

We will form your Family Limited Partnership under the personal direction of a qualified attorney who makes certain that all requirements are met.

SPIEGEL & UTRERA, P.A., is your one source for business legal services.

MORE SERVICES FOR YOU.

To save you time and run around, we can get your Federal Tax Identification Number for you and start the paper work for your State Sales Tax Number.

And that's not all.

Want a Tax-saving home office lease? Car lease? Mail Forwarding Service? We'll provide them.
 
Should you have any questions regarding Family Limited Partnership Agreements or Family Limited Partnership, please do not hesitate to contact any of our offices at the numbers listed below.

Good luck with your business!

Spiegel & Utrera, P.A. Staff

SPIEGEL & UTRERA, P.A. is your one source for business legal services.
 
SUCCESS STARTS WITH PLANNING! LET SPIEGEL & UTRERA, P.A. HELP YOU GROW YOUR BUSINESS.

Spiegel & Utrera, P.A. is a full service law firm that can help you solve most of the problems associated with incorporating, before they happen. Here are solutions to most of your incorporating needs.

MORE SERVICES & FEES

General Counsel Club & Registered Agent Service
Our firm has what we call the "General Counsel Club". Select this valuable service at the time of ordering your Family Limited Partnership and receive an additional one month Bonus - so that your first year of service will cover 13 months PLUS take a $50 discount, so you pay only $89.95 for the first 13 months of service. You get unlimited telephone consultations all year long on all your legal matters, both business and personal, plus our firm will prepare the Notice and Minutes of your Family Limited Partnership's Annual Meeting of Partners; our firm will comply with all statutes and applicable laws relating to your Family Limited Partnership's Registered Agent & Registered Office; our firm will review all mandatory State Family Limited Partnership filing documents as required by the Secretary of State; our firm will act as your Family Limited Partnership's General Counsel; and you will receive our firm's newsletter, "Entrepreneur's Alert®", which is published six times a year and provides valuable insight into running your business from a legal and business point of view.

Detours and Contradictions
Want more out of your Family Limited Partnership? Then don't miss Lawrence Spiegel's, 223 page Detours and Contradictions. Use this book, and all your available resources, to begin the challenging yet fulfilling journey of entrepreneurship. As we'll see... having a marketable idea is only the first step in a lengthy process. Along the way you'll encounter numerous detours and contradictions, risks and rewards. The price of Detours and Contradictions is just $13.50 if you order when forming your Family Limited Partnership. PLUS there is no extra charge for shipping, handling and processing as your book will be shipped with your Family Limited Partnership. Also, as an added bonus, your copy of Detours and Contradictions will be personally autographed by Lawrence J. Spiegel.

Charlie's Entrepreneurial Journey
Building your business, or selecting the type of business to start, is easy when using Charlie's Entrepreneurial Journey as a guide and applying Lawrence J. Spiegel's thirty eight "Principles of Entrepreneurship" to your business. Spiegel's latest book provides 416 pages of insight into the world of an aspiring entrepreneur named Charlie. Charlie's journey leads him through topics never discussed in business books but essential to success. Topics include: costs associated with Acquiring a Customer, Urgency to Purchase, Saturation Advertising, Success Leaves Tracks and Repetitive Business. Spiegel's "Principles of Entrepreneurship" cannot be found anywhere else. In fact, no one has ever exposed the business secrets Spiegel discloses. If you are seeking to spark your business you will find an EXPLOSION in this book. Order this book at the time of forming your corporation and you will get Charlie's Entrepreneurial Journey for $19.50 which includes shipping, handling and processing, when ordered with the formation of your company. PLUS Lawrence J. Spiegel will personally autograph your copy of Charlie's Entrepreneurial Journey.
Service Agreement
If your Limited Partnership is a service business, you'll need a Service Agreement.
The bedrock foundation of many service businesses is a customized written agreement entered into with its customers. Many franchises sold for tens of thousands of dollars are business formats revolving around a Service Agreement. The key with a Service Agreement is to make it work as a marketing tool offering the business services in the widest variety of formats to your customers. For example, a one-time use customer needs to be converted to a monthly, quarterly or annual type repeat customer. At Spiegel & Utrera we want to help you get, and keep, your customers while looking professional and at the same time maximizing each sale with a friendly service agreement. A Service Agreement is only $367.95 if ordered at the time of forming your family limited partnership. We will prepare a draft of your Service Agreement and deliver the draft by fax or email to you for your review. Once you have had an opportunity to review the Service Agreement we will meet over the telephone to discuss the various aspects of the draft Service Agreement. Thereafter, Spiegel & Utrera will make changes to the Service Agreement to finalize it. Once the Service agreement has been finalized and delivered to you, you should take it to your printer to be printed and padded so it will always look professional and non-negotiable.

Non-Voting Limited Partnership Interests
Allowing differences in voting rights is particularly advantageous to entrepreneurs who need to attract additional capital, but who also want to retain voting control over their partnership. For example, as a founding partner, you may want to have all of the voting partnership interests so as to participate in the management of the partnership and control its operations, while transferring all of the non-voting partnership interests to others so that they may share in the appreciation value and earnings of the partnership. Seasoned business-owners will instinctually recognize the value of such an agreement. We'll draft a special provision for your partnership agreement and issue special certificates for non-voting partnership interests. This item costs only an additional $74.95 if ordered at the time of formation. Also, you'll want to protect yourself with a Limited Partners Restrictive Agreement.

New Jersey New Hire Reporting
All New Jersey employers are required to report basic information about employees, who are newly hired, rehired, or who return to work after a separation of employment. You must submit a report for each newly hired employee. Failure to report new hires within 20 days of their hire date may result in civil penalties. There may be a $25 fine per each newly hired employee or, if the State determines there is a conspiracy between employer and employee not to report the penalty can be up to $500 per newly hired employee. We can provide you with a package of 6 New Hire Registration Certificates for $35. When ordered with the formation of your Family Limited Partnership the documents are customized with your Family Limited Partnership's information, and you may re-use them for each person you employ.

New Jersey Purchaser's Resale Certificates
State and local tax laws require that vendors have in their files properly executed Exemption Certificates given to them in good faith by all of their customers who claim New Jersey Sales Tax Exemption. We can prepare a set of Exemption Certificates for you to give to vendors from whom you intend to buy goods either for resale or export. The fee for a set of 6 reusable Resale Certificates is only $35 when ordered in conjunction with the formation of your Family Limited Partnership.

New Jersey Exempt Use Certificates
When your Family Limited Partnership makes a purchase that will be used for an exempt purpose under the Sales & Use Tax Act, your Family Limited Partnership must provide each vendor with an Exempt Use Certificate to be exempt from paying State or local sales taxes. The fee for a set of 6 reusable Exempt Use Certificates is only $35 when ordered in conjunction with the formation of your Family Limited Partnership.

New Jersey Post Registration Compliance - NJPRC
Whenever a Partnership is filed in the State of New Jersey, the Partnership is required to file Post Registration Compliance documentation for applicable taxes and related liabilities that are administered by the State of New Jersey. The Partnership must register within 60 days of filing the new business entity or, if the business will be collecting sales tax, at least 10 days prior to the date of the business entity's first sale or use of exemption certificates. We can initiate the documentation to register your business for you and deliver it with the Partnership. The cost at the time of incorporating is $75.

Mail Forwarding Service
If you have not set up your Family Limited Partnership office or you want your attorney to receive your Family Limited Partnership mail, you may use any Spiegel & Utrera, P.A. office address as your mailing address. Our mail forwarding service is only $15 per month. There is a six month minimum order. There is also an initial postage deposit of $25, additional postage/shipping, if any, will be billed separately. For our mail forwarding service terms and conditions, click here.

TAX-RELATED

Federal Tax ID Number
The equivalent of a social security number for an Family Limited Partnership. You will need it to operate your business and open a bank account for the Family Limited Partnership. We can obtain this number for you and the advantage of allowing us to get it for your Family Limited Partnership, is that we will deliver it with your Family Limited Partnership for only $35, so you may open your bank account immediately. If you are a Foreign National without a United States Taxpayer Identification Number or a United States Social Security Number, the charge for the Federal Tax ID Number is $110.
FAMILY LIMITED PARTNERSHIP OPTIONS

Family Limited Partnership Agreement
In order to process your Family Limited Partnership, you will need a Family Limited Partnership Agreement prepared by our Firm or, if you already have a Family Limited Partnership Agreement, you will need to furnish our Firm an opinion letter from qualified independent legal counsel representing the proposed Family Limited Partnership stating counsel has reviewed the Family Limited Partnership Agreement and such Agreement is fully compliant with New Jersey law and represents the business entity contemplated by the parties.

A well-drafted Family Limited Partnership Agreement will:

• Describe the amount of capital contributions that the partners have to make, how much and when distributions of profits will take place and allocate losses among the partners to minimize tax liability;
• Ensure compliance with filing requirements with the Secretary of State by mandating an annual report;
• Provide a framework for the settlement of disputes between partners by allowing mediation and arbitration as a quicker, cheaper method;
• Prevent a partner from selling his stock to a third party without first offering it to existing partners as a right of first refusal;
• Provide a framework for the purchase of a Limited Partnership interest by the remaining partner in the event a partner dies with a right of first refusal;
• Prevent a partner from competing against the Limited Partnership by selling the same products or offering the same services;
• Require partners to maintain the confidentiality of all customer names and other business records so that partners don't run off with valuable Limited Partnership secrets or intellectual property;
• Prevent a partner from impairing the goodwill of the Limited Partnership by bad-mouthing the management or financial standing of the business; and
• Prevent a partner from soliciting customers of the Limited Partnership for new Limited Partnership business.

Obviously, this is a very thorough Contract. It is drafted by our attorneys and used by business owners such as yourself. This agreement is very versatile and an absolute necessity for a Family Limited Partnership with multiple owners. Remember the old adage, "An ounce of prevention is worth a pound of cure." A Family Limited Partnership Agreement is $449.95 for up to four partners. Additional partners and complex Limited Partnerships require additional charges which are available upon request.

Limited Partners Restrictive Agreement
We strongly recommend you enter into a Limited Partner Restrictive Agreement. This agreement is entered into by the Limited Partners and the Family Limited Partnership to enumerate and describe the rights and obligations of the Limited Partners to each other and to the Family Limited Partnership. More particularly, it affords a right of first refusal where in the event a Limited Partner wants to transfer their partnership interest it requires approval and/or a buyout by the other limited partners.

A draft of this agreement will be prepared as part of our service, so you may review the Agreement, make changes and discuss it with one of our Attorneys. Please bear in mind that this Agreement is customized specifically for your Family Limited Partnership. Normally, the fee to prepare such a comprehensive agreement of this nature would be $1,500 or more. However, your cost is only $150 if prepared in conjunction with the formation of your Family Limited Partnership.

Limited Partner Divorce Protection Provisions in the Limited Partners Restrictive Agreement for Limited Partnerships
Unfortunately, many eager entrepreneurs anticipate a successful business venture but never contemplate the "down side." Of course, our Firm recommends that individuals protect themselves by having business entities as Limited Partners in the Partnership to add a layer of limited liability protection, but what happens if a Limited Partner is an individual that gets divorced? Will the Limited Partnership interest remain with the Limited Partner or get awarded to the spouse as part of the divorce settlement? What happens if a Limited Partner tries to convey or assign their Limited Partnership interest to a spouse or former spouse to meet their obligations? A carefully drafted provision in the Limited Partners Restrictive Agreement should afford a right of first refusal when a Limited Partner wants to transfer their Limited Partnership interest by requiring a buyout of the Limited Partnership interest by the other Limited Partners. Such a provision will protect the current Limited Partners from potential ownership by divorced spouses or other possible sources of ownership conflict. For example, assume a Limited Partnership set up by husband John Smith, wife Pocahontas Smith, and son Al Smith. All are Limited Partners, and son Al is married to Patti Smith. What happens if Al and Patti Smith file for a divorce? Provisions in the Limited Partners Restrictive Agreement require that in the event of the filing of a divorce involving a Limited Partner of the Limited Partnership, a notice is sent to the other Limited Partners offering them a right of first refusal, which allow them to purchase Al Smith's Limited Partnership interest to avoid having Patti Smith as a Limited Partner, especially after a nasty divorce. Furthermore, even if none of the Limited Partners want to buy the Limited Partnership interest at issue, any transfer of Limited Partnership interest would require unanimous consent of the other Limited Partners. Let us draft these special provisions to protect your Limited Partnership from divorce for an extra $75 when ordered with the Limited Partners Restrictive Agreement at the time of formation or $150 thereafter.

General Partners Restrictive Agreement
We strongly recommend you enter into General Partner Restrictive Agreement. This agreement is entered into by the General Partner and the Family Limited Partnership to enumerate and describe the duties of the General Partner and to the Family Limited Partnership. More particularly, it affords a right of first refusal where in the event a General Partner wants to transfer their partnership interest it requires approval and/or a buyout by the Limited Partners.

A draft of this agreement will be prepared as part of our service, so you may review the Agreement, make changes and discuss it with one of our Attorneys. Please bear in mind that this Agreement is customized specifically for your Family Limited Partnership. Normally, the fee to prepare such a comprehensive agreement of this nature would be $1,500 or more. However, your cost is only $150 if prepared in conjunction with the formation of your Family Limited Partnership.

General Partner Divorce Protection Provisions in the Limited Partners Restrictive Agreement for Limited Partnerships
Unfortunately, many eager entrepreneurs anticipate a successful business venture but never contemplate the "down side." Of course, our Firm recommends that individuals protect themselves by having business entities as General Partners managing the Limited Partnership to add a layer of limited liability protection, but what happens if a General Partner is an individual that gets divorced? Will the Limited Partnership interest remain with the General Partner or get awarded to the spouse as part of the divorce settlement? What happens if a General Partner tries to convey or assign their Limited Partnership interest to a spouse or former spouse to meet their obligations? A carefully drafted provision in the Limited Partners Restrictive Agreement should afford a right of first refusal when a General Partner wants to transfer their Limited Partnership interest by requiring a buyout of the Limited Partnership interest by the other Partners. Such a provision will protect the current Partners from potential ownership by divorced spouses or other possible sources of ownership conflict. For example, assume a Limited Partnership set up by husband John Smith, wife Pocahontas Smith, and son and General Partner Al Smith. All are Partners, and son Al is married to Patti Smith. What happens if Al and Patti Smith file for a divorce? Provisions in the General Partner Restrictive Agreement require that in the event of the filing of a divorce involving a General Partner of the Limited Partnership, a notice is sent to the other Partners offering them a right of first refusal, which allow them to purchase Al Smith's Limited Partnership interest to avoid having Patti Smith as a General Partner, especially after a nasty divorce. Furthermore, even if none of the Partners want to buy the Limited Partnership interest at issue, any transfer of Limited Partnership interest would require unanimous consent of the other Partners. Let us draft these special provisions to protect your Limited Partnership from divorce for an extra $75 when ordered with the General Partners Restrictive Agreement at the time of formation or $150 thereafter.

Family Limited Partnership Management Agreement
A Family Limited Partnership may enter into a written Management Agreement between the Family Limited Partnership and the General Partner. The Management Agreement should be drafted in such a way so that it conforms with the provisions of the Family Limited Partnership Agreement and, in addition thereto, it will:

• Spell out the terms of employment, such as the duties, responsibilities and compensation of the General Partner.
• It states that the General Partner will not compete against the Family Limited Partnership for a specific period of time after leaving the Family Limited Partnership;
• Prohibit the General Partner from disclosing any of the Family Limited Partnership's business records, computer data, trade secrets, methods of operation, et cetera;
• Prevent the General Partner from soliciting customers or clients of the Family Limited Partnership;
• Prevent the General Partner after leaving the Family Limited Partnership, from soliciting the Family Limited Partnership's employees to work elsewhere.

A Family Limited Partnership Management Agreement is generally used in two situations. The first is when one Limited Partner of a multi-Partner/owner Family Limited Partnership becomes the General Partner. The other situation is when an individual becomes the General partner who is not a Limited Partner. This Agreement sets out the duties and responsibilities of the General Partner to the Family Limited Partnership. The Agreement also covers such topics as compensation, confidentiality, non-compete, check signing, use of Family Limited Partnership assets and any other topic required by your Family Limited Partnership. Please bear in mind that this Agreement is customized specifically for your Family Limited Partnership. Normally, the fee to prepare such a comprehensive agreement of this nature would be $1,500 or more. However, your cost is only $150 if prepared in conjunction with the formation of your Family Limited Partnership.

General Partner Indemnification Agreement and Covenant Not to Sue
We strongly recommend that you include special provisions in your Certificate of Family Limited Partnership and additional agreements which trigger this important protection requiring the Family Limited Partnership to indemnify and hold harmless its General Partner from any actions it takes on behalf of the Family Limited Partnership and to reimburse the General Partner for Family Limited Partnership start up costs. If the General Partner is ever sued for actions taken on behalf of the Family Limited Partnership, these provisions require that the Family Limited Partnership be held responsible. These important provisions and agreements cost only an additional $75 if ordered at the time of formation of your Family Limited Partnership.

Limited Partner Indemnification Agreement and Covenant Not to Sue
We strongly recommend that you include special provisions in your Certificate of Family Limited Partnership and additional agreements which trigger this important protection requiring the Family Limited Partnership to indemnify and hold harmless the Limited Partners from any actions they take on behalf of the Family Limited Partnership and to reimburse the Limited Partners for Family Limited Partnership start up costs. If the Limited Partners are ever sued for actions taken on behalf of the Family Limited Partnership, these provisions require that the Family Limited Partnership be held responsible. These important provisions and agreements cost only an additional $75 if ordered at the time of formation of your Family Limited Partnership.
Lender's Agreement & Promissory Note
Initially a Family Limited Partnership needs a cash infusion. Additionally, the Family Limited Partnership may require a continuing advance of funds for some time. Its important to minimize the amount of money a Partner is required to pay for the Family Limited Partnership in the Family Limited Partnership because the Partners could be held personally liable by the Family Limited Partnership and/or the creditors of the Family Limited Partnership for not contributing all the funds the Partners had initially agreed to contribute to the Family Limited Partnership. How does the Family Limited Partnership get the money? After the initial purchase of its Family Limited Partnership interests, generally, the Family Limited Partnership has two choices for obtaining additional money: (1) Partners can contribute additional funds for their Family Limited Partnership interest (not the preferred method as previously stated) or (2) loan money to the Family Limited Partnership. Lending money to the Family Limited Partnership is the preferred method to advance money to the Family Limited Partnership because the lender is seen as a creditor of the Family Limited Partnership. The lending of money to the Family Limited Partnership is accomplished with a Lender's Agreement and a Promissory Note. Both of these instruments together provide for an initial amount of a loan to the Family Limited Partnership and also provide for future advances of money the lender might make to the Family Limited Partnership. In the event of failure of the business, the loan will be fully tax deductible by the lender as a bad debt. The fee for the Lender's Agreement and Promissory Note, if ordered at the time of the formation of your Family Limited Partnership, is only $75.

Security Agreement for Family Limited Partnership
Once you have decided to use the Spiegel & Utrera, P.A. Lenders Agreement and Promissory Note, the next step is to collateralize the personal property assets of the Family Limited Partnership in favor of you, the lender with a Security Agreement. A Security Agreement is a contract between a lender and borrower. The Security Agreement gives the lender a security interest and the right to repossess personal property that a borrower has offered as collateral if a note is not paid per its agreed terms. This right is superior to all subsequent creditors provided the lien given by the Security Agreement is perfected. The Security Agreement available from Spiegel & Utrera, P.A. is complete and includes provisions relating to type of collateral being secured, address where collateral will be kept, executing further documents, events that shall constitute a default, assignment of secured collateral by holder, a listing of events that would constitute default by the borrower and the rights of the lender should the borrower default. Provided you have ordered the Spiegel & Utrera, P.A. Lenders Agreement and Promissory Note, the fee for the Security Agreement, if ordered at the time of forming your Family Limited Partnership, is an additional $75.

Perfecting the Lien Created by the Security Agreement - Uniform Commercial Code
Liens against personal property are perfected differently than liens on real property. The use of the phrase "personal property" does not mean property owned personally by the owner of a business. Instead, the term refers to all property used inside or outside of a business (with the exception of real property) including equipment, furniture, inventory, etc. To perfect a lien against personal property used in a business, strict adherence must be followed pursuant to the Uniform Commercial Code, documentation must be created, executed and filed with the appropriate government agencies. Once recorded, the Uniform Commercial Code makes a lien valid and serves as notice that the lien exists. Usually, the first recorded lien takes priority. Provided you have ordered the Spiegel & Utrera, P.A. Lenders Agreement and Promissory Note and the Spiegel & Utrera, P.A. Security Agreement, the documentation required to perfect the lien under the Uniform Commercial Code is $75, if ordered at the time of forming your Family Limited Partnership.

LEASE/AGREEMENT CONSULTATIONS

Avoid costly mistakes, always, always, always have any type of Contract/Lease or otherwise legally binding agreement reviewed by an Attorney BEFORE you sign it. We offer Consultations at our Los Angeles office and over the phone for $100. per half hour or a fraction thereof. For your convenience, you can fax us the documents that need to be reviewed and the attorney can advise you over the phone. Some of the topics you may wish to discuss include:
 
Real Estate Purchase Reviews: Review of purchase/sale agreements associated with the purchase of real property.
Business Purchase Review: Review of purchase/sale agreements associated with the purchase or sale of a business.
Commercial Lease Reviews: (including Business Spaces such as: Offices, Stores, Warehouses, and Commercial Lofts)
 
Our staff has many years of experience representing Tenants. Having your lease reviewed BEFORE you sign on the dotted line can save you thousands of dollars.

In our review we address issues such as:

• Rentable vs. Usable Space
• Reasonable Rental Rates
• Free Rent
• Best Length of Lease
• Options to Extend the Lease & Purchase the Premises
• Leasing contiguous space for expansion
• Assignment and Subletting
• Caps on Rent increases and expenses demanded by Landlords
• Repair Responsibilities
• Exclusivity of Tenant's Business
• Early Termination Rights
• Personal Guarantees, should you or should you not
• Renewal Terms
• Zoning Issues
• Landlord build out costs
• Change of Control of Tenant
• Signage Protection

TAX SAVING LEASE AGREEMENTS

Home Office Lease
Agreement detailing the leasing of office space by a homeowner or tenant with a Family Limited Partnership for use as the Family Limited Partnership 's principal place of business. The typical tax savings under this agreement can exceed $1,200 per year. The Home Office Lease is only $150 when ordered with your Family Limited Partnership, and as an added bonus to our clients, we draft the Lease in such a manner that it is automatically renewable from year to year at no additional charge.

Motor Vehicle Lease
If you use your vehicle for business purposes, it is usually much more advantageous to keep the vehicle in your name and lease the vehicle to the Family Limited Partnership. The typical tax savings under this type of arrangement ranges between $1,500 and $3,000 per tax year. As an added bonus to our clients, we draft the lease in such a manner that its automatically renewable from year to year at no additional charge. We can prepare the lease for only $150 when ordered with formation of your Family Limited Partnership.

Office Equipment Lease
A lease which details the leasing of office equipment by a business. Once again, by leasing equipment to the Family Limited Partnership, you create a legitimate business expense for the Family Limited Partnership and a Tax Deduction. Typically, the tax savings under this type of arrangement can exceed $1,000 per tax year. As an added bonus to our clients, we draft the lease in such a manner that it's automatically renewable from year to year without additional charge. The cost for an Office Equipment Lease is only $150, when ordered with the formation of your Family Limited Partnership.
 
EMPLOYEES / INDEPENDENT CONTRACTORS

Employee Benefits and Policies
If you are using employees in your business, it is important to have written Benefits and Policies.  Let us prepare your Employee Benefits and Policies.  Unlike the Employment Agreement, the Employee Benefits and Policies creates an understanding of the entitlements of the employee relative to the policies of the business and provides protection for the business.  The Employee Benefits and Policies will be customized for your business and are designed to cover:

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