A type of business that involves two or more people who share ownership and control over the business.
Partnership agreement: A legal document that outlines the terms and conditions of the partnership including profit sharing, management responsibilities, decision-making authority, and exit strategies.
Types of partnerships: There are several types of partnerships including general partnership, limited partnership, limited liability partnership, and joint venture. Each type has its own set of advantages and disadvantages.
Partnership taxes: Partnerships are subject to different tax rules than corporations or sole proprietorships. Partners report their share of profits and losses on their individual tax returns.
Partner roles and responsibilities: Partnerships require a clear understanding of each partner's roles and responsibilities. This includes management, financial, and operational responsibilities.
Managing conflicts in partnerships: Partnerships can face conflicts due to differences in opinion or management decisions. It's important to have a plan in place to address and manage conflicts.
Termination of partnerships: Partnerships can end for a variety of reasons including disagreements, death of a partner, retirement or dissolution. It's important to have a plan in place for how to end the partnership.
Capital contributions: Partners may contribute capital to the partnership in the form of cash, property, or services. The partnership agreement should outline the required contributions and how they will be documented.
Profit sharing: Partnerships typically share profits and losses equally. However, the partnership agreement can specify a different ratio for profit sharing.
Liability protection: Limited liability partnerships provide protection to partners from personal liability for the acts of other partners. Other types of partnerships do not provide this protection.
Management structure: Partnerships can have different management structures including equal management responsibilities for all partners, or assigning different management responsibilities to specific partners.
Decision-making authority: Partnerships must establish a decision-making process that is fair and allows all partners to have input into important decisions.
Exit strategies: Partnerships need to have a plan in place for how to exit the partnership. This can include a buyout agreement, sale of the business or dissolution of the partnership.