Partnerships are associations of two or more people for the purpose of running a business to benefit. In some cases, partnerships are similar to single ownership. They are relatively simple and cheap to form, and tax responsibilities and tax responsibilities are entirely with the owner. With some owners, partnerships provide potential talent capabilities and decision making among ownership. They also tend to have access to better financing, some thanks to the willingness of banks to lend money to business with more than one owner to share credit risk.
Association of two or more or more for the purpose of running a business to benefit
Partnerships also have some important weaknesses, not least among them are the lack of protection of liabilities for their owners. Some owners can also be a source of conflict, which leads to managerial problems. And keeping sustainability in partnership can be the same as a single ownership. The departure or death of a partner can create a financial burden that the remaining pairs cannot be overcome.
Actually there are several types of partners, although the most common are general partners, which are active in business and have unlimited liabilities. All partnerships must have at least one general partner. Other types of partners include:
Limited pairs, whose obligations are limited to the amount of money they invest
Silent partners, known as partners by the public but are not active in business
Inactive partners, which are not known by the public and are not active in business
Only nominal partners, which only partner, such as when a celebrity allows businesses to use their names for promotion
The path for … compiling a partnership agreement
Partnerships can be formed with handshake, but the preferred route is having a lawyer who compiled a simple partnership contract that will be signed by all participants. This agreement must discuss some important topics:
Structure: Show what percentage of companies have by each partner.
Task: Determine which partner is responsible for which part of the company’s daily management.
Advantages: Details of profit and loss distribution, and determine when profits must be distributed to partners.
Conflict and Crisis: Establish how disagreements between partners will be resolved (for example, with arbitration) and how death or departure partners will be managed.
Dissolution: Explain how the company’s assets and liabilities will be distributed if the partnership is dissolved.
Many business owners contemplate a crisis or uncomfortable failure when they just started a new business, but it is important to provide answers to difficult questions before forming a partnership.
Partners need to plan late-at the beginning
Dave’s friend and Mitch sharpened their own brewing skills while sharing an apartment during college. After graduating, they decided to change their hobbies to become a business and launch a website that sells online brewing supplies online. Dave’s sister, a lawyer, compiled their partnership documents. They refused hard when he told them the agreement needed to describe the way to dissolve partnerships – why do they want to talk about stopping before they start? They gave up and suggestions proved to be very valuable.
After two years, their e-business was fine when Mitch announced that he wanted to get out of the partnership: his Spanish girlfriend returned to his home country and he went with him. Fortunately, the partnership agreement provides a means for Dave – who likes e-business and wants to make it go – to buy Mitch over time. They separated as friends and were able to devote their full attention to the love of their lives.