Establishing Partnership
A partnership is the simplest business structure and also a much less expensive form than a corporation. Basically, a partnership may be either a general partnership or a limited liability partnership.
In general partnership, the partners have full control of business operations and have the responsibility regarding the partnership's debts and obligations. Hence, in case of debt or bankruptcy, the courts can legally seize the owners' private assets to pay creditors. On the other hand, the owners of a limited partnership do not have any involvement in the partnership's business operations. Their liabilities only rely on the amount of their investment.
The success of a business partnership may depend on several factors such as the following:
- Good business strategy and implementation
- Individual functions and responsibilities
- Good communication between partners
As a business structure, a partnership is vulnerable to disputes. Hence, it is essential to plan and develop a written partnership agreement that will specify the rights and responsibilities of parties. A written agreement will also help you establish guidelines such as shares of profits and losses, what will happen if the other partner leaves, among other. Without it, a partnership may be ill-equipped to settle conflicts when they arise.
Business Corporate Attorney can help you structure a business partnership with a written agreement suitable to your business needs and goals.
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