We have so many businesses in Washington DC these days in fact, many do not know that Washington, DC has a thriving small business community.  Between neighborhood restaurants on H Street, ice cream shops in Georgetown, cleaning services working across Capitol Hill, and independent boutiques in Shaw, all add to the character of the city.  Many of these businesses are started by partners: friends, family members, or former coworkers who decide to build something together.

A partnership can be a great way to launch a DC business. It can also create serious problems when expectations aren't put in writing.

The Good: Why Partnerships Work for DC Small Businesses

Small business attorney Bethesda MD Those that have gone through it know that opening a business in the district isn't cheap. Commercial rent, build-out costs, equipment, and licensing add up quickly. Partners can pool resources and share the financial load. Partners also bring different skills. In a restaurant, one partner may run the kitchen while the other handles the front of house and finances. In a cleaning company, one partner might manage crews while the other lands commercial contracts. An ice cream shop or retail store may pair a creative owner with a business-minded one. When roles are clear, a partnership can grow faster than a solo venture just like the ole saying "two heads are better than one."

What Can Go Wrong?

Probate attorney Washington DC It's important to know that DC is not immune. DC partnerships run into the same issues we see everywhere, plus some specific to the city's business environment:

• No partnership agreement. Under DC's Uniform Partnership Act, two people running a business together can form a general partnership without a formal filing. Without a written agreement, default rules govern profits, decisions, and exits.
• Personal liability. In a general partnership, each partner may be personally responsible for business debts, including a lease, a supplier contract, or a claim from a customer or employee.
• Lease problems. Many DC commercial leases require a personal guarantee. If the partnership falls apart, who is still on the hook for the rent?
• Licensing and compliance. DC businesses generally need a Basic Business License, and restaurants face health inspections, and possibly alcohol licensing. If a partner who holds a license leaves, the business can be disrupted.
• Employment issues. Restaurants, cleaning services, and retail shops often have hourly workers. Disputes over who handles payroll, wage compliance, and hiring can create legal exposure for all partners.
• Unequal effort. One partner works 70-hour weeks at the shop while the other shows up occasionally. Without defined duties, resentment grows.
• Exit and buyouts. What if a partner wants to sell their share, open a competing shop down the street, or simply walk away?

Why a DC Business Law Attorney Is Essential

A business law attorney licensed in the District of Columbia will help you: 

• Choose the right structure, such as an LLC, to help protect your personal assets
• Draft a partnership or operating agreement covering ownership, contributions, management roles, profit sharing, and decision-making
• Include buy-sell, non-compete, and exit terms that fit your business
• Review commercial leases and personal guarantees before you sign
• Guide you through DC business registration and licensing requirements
• Resolve partnership disputes through negotiation, mediation, or litigation when necessary and so much more. 

Build Your DC Business on a Solid Foundation

The Law Office of Brian Gormley LLC is based in Bethesda, Maryland, and licensed to practice in the District of Columbia, Maryland, and Virginia. Works with DC entrepreneurs, including restaurant owners, cleaning service operators, ice cream and dessert shop owners, and independent retailers, to set up partnerships the right way and protect them as they grow. In fact, they have an entire suite of services just for entrepreneurs.