Form a usual Partnership Business
A business partnership is an agreement between two or more individuals to operate a business jointly. When two or more persons agreed to form a business and run by them with a view to earning a profit is called partnership business. Partners are responsible for the other partner’s business actions, as well as their own. To form a business partnership:
- List the amount of equity to be invested by each partner.
- Determine how the profit or loss will be divided among the partners.
- Establish compensation levels for each partner, including when the compensation will be given and any restrictions and might affect that compensation.
- Set guidelines for how the business will be modified or dissolved should one or more partners wish to end the partnership.
- Define procedures for settling any disputes which might arise.
- Determine who has authority for which expenditures and how expenditure decisions are to be made.
- Develop procedures to follow in case of death or incapacitation of a partner.
- Write and sign an agreement detailing the responses to the questions above.
- A general partnership can be formal simply by an oral agreement, but a legal partnership agreement drawn up by an authority is highly recommended.