Rather than going it alone as a sole trader, many business owners decide on entering into a business partnership agreement with one or more other people. After all, this helps to share the workload and the responsibilities, as well as the investment of capital, so it often makes sense on many levels.
What Exactly Is a Business Partnership?
A business partnership is a group of people who carry on a business together and distribute income and losses between themselves. When it comes to the law, each individual party that makes up the partnership is liable should anything go wrong with the business.
Companies are considered to be a separate legal entity, whereas business partnerships are not.
Business Partnership Benefits
In a partnership, all risks are shared between the partners, and it’s often a more simple and cost-effective way to get a business up and running.
Each partner will also likely bring different skill sets to the business, as well as different networks of useful contacts.
Partnerships are also far more relaxed when it comes to reporting, as compared to the procedures required of a company.
Disadvantages To Business Partnerships
Although partnerships can have their good points, there are also potential downsides to the agreement and business structure.
These include things like each partner’s personal assets being at risk when it comes to business debt and liabilities. If one partner incurs debt, all other partners in the business are equally liable for that debt.
Like any type of partnership arrangement, there can be disputes and a falling out over things like business direction, structure and the sharing of business profits.
Be absolutely certain you want to go into business with the people involved before committing to a business partnership agreement.
One of the very best things you can do is to seek legal advice and establish a Business Partnership Agreement between all parties involved in the business. This will give you both a better legal standing should disagreements arise, as well as peace of mind for everyone.
Business Partners & Shareholder Agreements Brisbane
If you are located in the Brisbane area, before entering into a business partnership agreement or shareholder agreement, talk it over with your local legal experts at Aylward Game Solicitors. Our team has decades of experience in business law, so trust us to put you on the right track.
There’s no doubt that business partnerships can be a great thing. But it takes a special ‘bunch’ to make it work. Put aside ego and step up the hard work and you’ll be sure to reap the benefits in the long-run.
Blog Source : Aylward Game Solicitors