Considerations you Need to make Before Getting into a Partnership

Business partnership

  1. Percentage of ownership: First of all, you need to know that just because you are entering into a business partnership with another individual or group of individuals, it does not mean that all of you are compulsorily equal in the decision making of the company. This means that the extent of ownership can easily differ. The first step you need to take is to find out the percentage of your ownership. This is important because it helps you to know how much control you can exercise, about your voting rights and also about the part of the profit that will come to your bank account.
  2. Allocation of profits and losses: The profit is the sole reason why you all actually got into a partnership ever. It is the pivot on which each and every company of the world rests. Thus, while profits can be one of the most encouraging factors for partners to work together, it can also lead to the partnership turning sour. Thus, you must have a clear deal that is legal and states the amount the parties are going to get from the profits that the company earns. Also, in case of a loss, there must be clarity as to which partner is liable to pay what and to what extent. The written partnership must have the signatures of the involved owners so that it shows their agreement and acceptance of the terms and conditions stated.
  3. Decision making: Usually, partnerships start off well. They are cordial and warm. But, over time, the partners start having ego conflicts. This is because of their say in the decision making of the company. This decision making may relate to any one deal or may be pertaining to a number of company ethics and policies that need to be implemented. This is why you need to know the extent to which you can participate in the decision making of the company.
  4. The death of a partner: death truly has no calendar. Life has no guarantee. Someone may be hale and hearty one day and overnight you get the news of them passing away. There have been such instances in the past when the sudden death of a partner led to the downfall of a company and all the losses had to be suffered by the remaining partners who were still living. Thus, you must know what happens in case a partner dies suddenly. This is more important in case this is a partner who has a larger portion of ownership on the company.
  5. Resolving disputes:Disputes and conflicts are common at your place of work. Just like utensils are bound to clash in your kitchen, ideas from a number of different and creative minds are bound to clash at your office. Though these can be resolved easily, there may arise a situation where there is just no end to the banter. In such a situation, it may be predetermined if you will head to the court or not.

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