- HOW DO I FORM A PARTNERSHIP?
Forming a partnership can be done orally or in writing but it is always clearer to have it in writing. Because a partnership is a legally recognised business entity that imposes certain duties and obligations on its members, you should always be sure of the people you choose to form the Partnership with. It’s one thing to be friends with a person. It’s another to form a business entity with them and go about making money
- WHAT DOES A PARTNERSHIP DO?
Put simply, a partnership is an agreement between 2 or more people who want to do business for profit. If you enter an agreement with someone else to do business and make money, you may automatically form a partnership without being aware of it. Whenever you want to make money with other people, you should first set out the terms of the Partnership Agreement in writing. You don’t want an assumption that went unsaid to come back and haunt you later.
- CAN PARTNERS DECIDE WHAT THEIR OBLIGATIONS ARE?
Yes and no. Though there is much leeway in drafting Partnership Agreements, some things are determined by law. Partners can agree to share or delegate responsibilities, how they will share profits and losses, etc.
- WHAT DOES A PARTNERSHIP AGREEMENT NEED TO INCLUDE? Creating a Partnership Agreement is the most important step you’ll take when entering a partnership. You’ll need to make sure you have as much information in the agreement as possible so no-one is left confused or unsure of what their responsibilities are. Partnership Agreements need to state the purpose for which they are formed, the name of the business, the length the Partnership is intended to last, and much more.
- WHAT IF I WANT TO GET OUT OF THE PARTNERSHIP?
Your Partnership Agreement should cover all contingencies, especially exit strategies . If you’ve entered a Partnership Agreement with other people who want to sell the business or shut it down, but you want to keep going, your Partnership Agreement has to be clear about how to continue. Partnerships often have partners who have differing interests and wishes. And nothing causes more problems than a Partnership Agreement that is silent about how to handle these differing wishes.
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