Things to Remember Before Establishing a Business Partnership

Business partnerships provide opportunities for the business owners to share the business tasks thereby earning greater profits. On one hand the idea of a partnership business can prove to be fruitful by offering freedom of action for the individual business owners and on the other hand can result into a catastrophic relation.

A business partnership can be of several kinds depending upon the nature of partnerships. For a joint venture business the involving partners should agree upon the implementation of the business processes and the profit and losses occurred are allocated among them according to their agreements. In a general partnership business a general partner only owns a part of the business with indefinite legal accountability for the debts of the partnership. In case of a limited partnership business, limited partners can only invest but do not empower the right to interfere into the management issues of the concerned partnership business.

Unanimous decision-making is the key to a partnership business. Therefore in order to establish a successful business partnership the following points should be taken into consideration:

It is essential to analyze the potential and skills of the participating partners. Based on particular skills like marketing, technical, finance management the partners should be assigned particular responsibilities. All partners involved in a business partnership should exercise the agreed authorities and must follow the same tactical decisions for benefits of the company. A clear agreed course meeting the desires of the involving partners can result in a successful partnership business. Often the concept of equal participations results in disagreements and consequent failure. Therefore the involvement of a third partner can help in the decision making process eliminating enmities.

Regular communication between the associated partners is highly essential for building an efficient business partnership. Sharing views and opinions on a fixed time interval leaves the communicating platform open. Such an interactive communication can eliminate grievances, provide constructive ideas thereby harmonizing the relationships. A partnership agreement is not necessarily based on legal documentation, rather oral agreements between the participating members can build a strong business partnership. But in order to avoid the chances of disagreements in future, it is more preferable to put the legal settlements under documentation. A business partnership can operate smoothly only when the members pursue the same perspective.