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The business Partnership.

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Introduction

The Partnership: Considerations to take on board when forming a partnership if you are consider forming a business partnership with a colleague or friend, there are a number of legal issues and implications which you need to address before you begin to trade. Partnerships share's the control, responsibility and finances; this could be one other or several people, reducing the overall input one individual will give to the business. A partnership adopts a different strategy, instead of one person owning the company; a partnership can consist of between two and twenty people. In essence, this would mean that you would need to consider finding one or several people who you could trust unconditionally to take on joint or shared responsibility for the running of your business. Although this would mean that the profits and liability would be shared, a partner or partners would be able to inject fresh capital, as well as skill and ideas into your business enabling you to use this for further expansion and development. In partnership, perhaps you would need to consider if an ordinary or limited partnership would be the best for your business as the ...read more.

Middle

In conclusion, if investment is solely sort after, then a limited liability partnership should be the choice; if shared control of the business is required, then ordinary partnership should be considered with the choice of person carefully selected. When building a partnership business you need to decide how you would like the partners to integrate within the company, and should also consider the following: the partner or partner's abilities to drive the business forward, leadership qualities and management experience, level of specialist knowledge and expertise, the level of trust associated with the partner, it is recommended that a partnership agreement be arranged to legalize the partnership, this will help to avoid or clear-up any disputes which may arise - i.e. profit, liabilities or responsibility share, legal Requirements and other formalities. Once a decision has been made as to the type of partnership that you hope to adopt, the legal requirements should be taken into account to ensure the partnership can function properly. Whilst there are no legal obligations set for ordinary partners, it is recommended that a deed of partnership would be arranged to legalize the partnership, this will help to avoid or clear-up any disputes which may arise - i.e. ...read more.

Conclusion

The partner will not bring extra expertise, perhaps also extra capital. The responsibility of running the firm is shared. Share decision making and a shared workload will make running the business mush less stressful. Apart from information that has to be provided for tax purposes, the finances of the partnership are kept private. Division of labor means that the owners can specialise in what they are best at. On the other hand there's the disadvantage. The partnership not only has unlimited liability, meaning that the partners could lose all their personal wealth to pay the debts of the business, but each partner is liable for the debts of the business even if the debt was not caused by them. The partnership has a lack of continuity. For example, should one of the partners die, resign or be declared bankrupt, then the partnership is automatically dissolved and would have to be reformed. Partners can take decisions without consulting other partners and one partner's decision, whether the others agree with it or not, is binding on all partners. Even with the addition of extra sources of finance, there a lack of capital. However disagreements between the partners are possible and this could make decision making more difficult. ...read more.

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