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Commercial Partnerships

Starting a business is scary and a lot of work. That is why many business owners don’t want to do it alone. They decide that having a business partner is a good way to go.
Now, this doesn’t necessarily mean that you should ask your best friend if he wants to open up a business with you. Business partners should be able to get along, but the basis of the relationship should not be strictly friendship. Business partners should complement each other and have something valuable to contribute to the company.
            Commercial partnerships may consists of two or more people. There is no law restricting the number of partners allowed for one business. However, considerations should be taken as to how a large group would come to consistent agreements with so many different opinions.

Why a Commercial Partnership?

            Different factors lead to a decision of a commercial partnership. Some partner up to combine knowledge and expertise. Say you were to open a health club. If you were a health professional, say, a personal trainer, but didn’t know anything about running a business or customer service, you would want to pair up with someone who could help with that. Look for someone who would has experience managing a  business or maybe someone with hospitality experience to help with customer service. This insures your business with better success because all sides of the business are taken care of.
            Another reason some take on a partner is for financial purposes. If you had a partner, they could help you to come up with the initial investment needed to open the business. Since financing a business isn’t easy, collaborating to come up with the needed capital for the business is a sensible way to go. Sometimes you can even create a commercial partnership with someone just for their money. I know that sounds bad but some people like it that way. They put up a certain percentage of the money and they get back a certain percent of the profit. As long as the business prospers, they have made a good investment. These are called “silent partners” because they don’t have a say as to how the business is run but they don’t have to work at the business, either.

Commercial Partnership Agreements

            Before anyone puts up any money or deals are made, a wise thing to do would be to sit down together and write a partnership agreement.  Without this document, should any partner decide to disappear when times get rough, the remaining partner would assume liability for all debts incurred by the business. So, to protect all parties of this business venture, write down exactly how much each member of the partnership would be responsible in terms of money, time, and responsibilities. When calculating the money, specify how much would be given by each member for the start-up cost and ongoing monthly bills. Also specify how much money each member will receive in return for their investment; for example, a salary, or percentage of the profits. When calculating the time, decide on how many hours and which hours of the day each member will be responsible for.
            Writing a detailed partnership agreement between all members will ensure that the business will run smoothly and all partners get along. A financial or other type of disagreement that could not be resolved because the rules were not laid out, could be disaster for the business.

 
 
     
 

 

 
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