PARTNERSHIP IN BUSINESS || A GOOD WAY TO ACHIEVING A WIDER RANGE OF BUSINESS GOALS

talktofaith (70)in Project HOPE • 4 years ago (edited)

INTRODUCTION Establishing and running a business entails a lot of things. You may have the business idea, but lack sufficient resources to implement the business idea. You might also have some funds, but lack strategies on how to go about your business. At this point business partnership is necessary, as it will help in easing off some stress.

WHAT IS PARTNERSHIP?
Partnership is a formal business agreement between two or more people, to be co-owners, share in management profit and loss and as well distribute business responsibilities.
If you decide to organise your business as a partnership form of business, try as much as possible to make a detailed agreement on how decisions are to be made, how disputes are to be resolved; this will help you a lot when you encounters difficulties in the business.
The agreement should address the purpose of the business, the authority and responsibilities of each partner.

RELATED ADVANTAGES OF PARTNERSHIP BUSINESS

Partnership provides you with large resources, unlike sole propriatorship business where all contributions are made by one person.
Risk Sharing: All loses and profits are shared between partners.
It also has the advantage of different skills, knowledge, experience and talents of different partners.

TYPES OF PARTNERSHIP
There are different partnership implementable types, but i am going to be talking about two basic partnership types.

General Partnership:
Here the partners manage the company and assume responsibilities for partnership debts and other company obligations. If you are settling for general partnership, endeavour to create formal agreement stating each partner's role and shares.
General partnership is easy to establish, has low cost and at the same time flexible. But it also has some risks associated with it; as your personal assets are at risk upon any loss. Here partners are also liable for each other's action.
Limited Liability Partnership:
This kind of partners only get involved in the business via their investment. They don't have decision making rights in the business. They are not held responsible for business debts and other partner's action; in other words, partners have a liability protection from other member's actions. Here you cannot loose your personal assets if someone takes a legal action against the business. In this type of partnership, it is easy to remove or replace a partner.

THINGS PARTNERSHIP AGREEMENT WILL ADDRESS

The ownership and authority should be clearly stated; as well as how interests should be shared.
How and when to pay back a partner's money when he withdraws from the business.
Decision Making System: Establishing a voting right in case of disagreement is very necessary. It is dangerous for partners owning 50-50 on the business. So the idea of having a trusted associate who may own 1% of the business, but whose vote will really count as a third party is very important.

Although one needs to be conscious of the kind of partners you get involved in your business; but partnership is very necessary in a business to achieve a wider range of goals. So many businesses today that are doing well and making waves are into partnership.

Thank you for reading through my post.
Much love from @talktofaith.