Creating a business is an exhilarating venture that might also be overpowering. Some of the pressures that come along with starting a business could be alleviated by sharing the business with a partner.
Sharing accountability with a business partner may provide a little relief. Part of the work load and management can be taken on by a partner. Moreover, start-up costs or initial investment are shared, along with business expenses and risks. On the other hand, as expenses are shared, profits are too. In a partnership, partners are jointly, as well as individually liable for the other’s decisions, business actions and debts. With a
minimum of two partners, equity could sooner be seen over debt. A written partnership agreement is advised and should be signed by all partners.
Partnerships are simple to form and searching for a partner with harmonizing skills can be to the advantage of the business. In the midst of two minds instead of one, ideas are better and more scrupulously thought through. Nevertheless, unification with a partner additionally means business decisions are mutual. Beginning a new business could be emotional and for this reason some friendships do not outlive a partnership.
Different types of partnerships exist, for example Limited Partnerships, General Partnerships, and Limited Liability Partnerships. Equal rights to the business and responsibilities are given when two or more partners join in sharing General Partnerships. Limited Partnerships involve a partner which invests in the business although does not take part in management decisions of the business. This type of partner obtains a pre-determined quantity of the profit. A Limited Liability Partnership, otherwise known as an LLP, is an association where partners each take an active part in daily business decisions. A Limited Liability Partnership limits the total to which each partner may be held liable, presenting the partners some type of protection.
Various options exist when considering the kind of business partner one might want to take on. Items to think over are the sum of liability one is willing to risk, the initial investment or start-up available and the amount of management activity anticipated by each partner. Moreover, it is of consequence to partner with a person compatible to oneself.