Forming a Partnership
- Author Nashib Umer
- Published May 3, 2010
- Word count 614
If you have decided to form a partnership then you must go through an extensive process to make your partnership legally authorized. In this act of deed you need to start with;
-
Discussing the details of your business with your partner(s) face to face. This includes the objective and goals of the business, the products and services that will be offered, where the business will be operated, what role each business partner will have in the growth of the business.
-
Decide which type of partnership is more suitable for your business.
-
Once you decide the form of partnership the next step is to get an Employer Identification Number (EIN) for you and your partners to use in the course of business. That will be necessary for you to open your business bank accounts, register with your state and pay employees.
-
Now, its time to draw up a partnership agreement.
-
File your business license in your state and be sure to register your business as a partnership, listing all owners.
What is a partnership agreement or partnership deed?
Forming a partnership agreement is equally important because it reflects the way partners will perform their duties and tasks. Registering partnership means setting out the specific conditions that apply to the partnership. It will spell out the responsibilities of the parties involved and should as a minimum cover the following provisions.
-
Amount of equity invested by each partner.
-
Type of business.
-
How profits and loss will be shared.
-
Partners pay and compensation.
-
Restrictions of authority and expenditures.
-
Length of partnership.
-
Dispute settlement clause.
-
Settlement in case of death or incapacitation.
-
Retirement and Death Arrangements.
-
Terms for changes or dissolving the partnership.
-
Distributing assets on dissolution.
Is it necessary to develop a partnership agreement?
A partnership agreement is the key to keep business on track although it is not necessary.
It is a common practice that when two or more people work together, they are generally more concerned with their ideas, innovations and creative directions, rather than their legal status. However, it is important to consider and resolve the rights, roles and responsibilities of each member of the partnership in writing before a misunderstanding or dispute arises. Written agreement helps in this regards.
Remember a solid partnership should be founded on good communication.
How can I register partnership?
Partnership formation may take various forms depending on how the partners agree to create it and to carry out their objects and purposes
Can I invest other than cash in a partnership?
Yes, your investment can be either of any type like Physical Assets Furniture, Equipments, Land, Building etc.
General Partnership:
A general partnership (or simply partnership) is an association of two or more persons or other persons (such as a corporation and an individual) conduct business as "partners", whether officially or not, with the goal of earning a profit. All members of a general partnership are called General Partners. Each general partner takes part in the management of the business, and also takes responsibility for the liabilities of the business. If one partner is sued, all partners will be held liable. Anything that one partner does affect all of the partners, because each partner of the general partnership is personally responsible for all obligations of the general partnership. Forming general partnership is the least desirable for this reason.
Liability of General Partnership.
Points mentioned below can better describe the liability of General Partnership.
-
Every partner acts on behalf of the whole partnership business; therefore, each partner is liable for his or her own actions.
-
Every partner is liable for the actions of the other partners.
-
Every partner is liable for the actions of the employees of the business.
http://www.infotaxsquare.com providing business documents filing in all 50 states
Article source: https://articlebiz.comRate article
Article comments
There are no posted comments.
Related articles
- How to Resolve Differences in the Workplace Without Argument
- 5 Proven Ways to Motivate and Retain your Technology Employees
- 10 Reasons to Start Benchmarking Your Business Today
- Fostering Collaboration in a Technologically Evolving Workplace
- 20 Best Employee Time Tracking Software to Streamline Your Workflow
- Healthcare Project Management: Ultimate Guide
- Leadership Advisory: Embracing Output and Results-Driven Management for High-Performing Teams by Dr. TA Malapane
- How to Shield Your Contracting Business from Common Risks
- "The Future of Money: How Digital Currencies are Transforming Global Finance"
- Advanced Analytics in Supply Chain Management: Driving Efficiency through Data
- Zodot — An end to end free Saas Platform to Automate Your Daily Business Activities
- Guide to Workforce Planning: Process and Strategies
- Effective Business Mentorship Strategies for Startups
- Next-Generation Seismic Techniques for Efficient Permian Basin Exploration
- The Major Challenges In Government Payment Processes – Survey Reveals Critical Inefficiencies
- The Psychology of Online Bargain Hunting: What Small Business Owners Need to Know
- Cultivating a High-Performance Culture in Bangladesh: The Strategic Imperative of Employee Engagement
- Improving Coding Efficiency: Streamlined Workflows with Medical Coding Audit Services
- Ensuring Coding Accuracy: How Medical Coding Audit Services Identify and Correct Errors
- Streamlining Insurance Verification: How Healthcare Automation Services Simplify Eligibility Checks
- Managing Administrative Overload: Streamlining Processes with Healthcare Automation Services
- Navigating State Licensing Variations: Expert Guidance from Medical Licensing Services
- Ensuring Accurate Documentation: The Role of Medical Licensing Services in Error Prevention
- Navigating State Licensing Variations: Expert Guidance from Medical Credentialing Services
- Handling Multiple Credentialing Applications: Streamlined Management by Credentialing Services
- Handling Complex Medical Histories: Efficient Record Management by Patient Access Services
- Improving Overall Patient Experience: Enhanced Satisfaction with Patient Access Services
- Finding the Perfect Partner: A Comprehensive Guide to Choosing the Best Virtual Assistant Agency
- The Transformative Potential of Medical Virtual Assistants in Healthcare
- Maximizing Profitability: The Economics Behind Customizable Design Assets