What is a business partnership?
A business partnership can be a complicated legal being. A partnership is a business owned by two or more individuals. There can be partners that invest money and work the business and/or partners that invest money (capital) but do not work at the business.
The most important thing to remember is before entering a business partnership is you need to speak with and get advice from a lawyer. The lawyer needs to do a written partnership agreement that will include:
- The name, location, and type of business you are going to operate.
- The name, capital investment, and duties of each partner.
- Ways to admit a new partner.
- How the partners will share profits and losses of the business.
- How the partners can withdraw assets from the partnership.
- How will disputes be settled among partners.
- Procedures for settling with a partner who leaves the partnership.
- Procedures for removing a partner from the partnership who is not willing to leave.
- Procedures for liquidating the partnership, including selling the assets, paying off the liabilities, and distributing any remaining cash to the partners.
Sounds a bit like a prenuptial agreement doesn’t it ? I’m going to leave you here to “chew over” all the information mentioned above. They do have their positives and negatives, it boils down to what will suit yours and the business’s needs. There is a lot to tell you about partnerships and I will continue to write more in the next day, or so.