Partnerships: To be or not be

Partnerships: To be or not be - [[1945009?] it was once, long ago, there was a new mother, the wish for a successful venture with her close friend who shared her dream of one day possession of the finest maternity boutique in VanLand. They shared the vision, motherhood, love all things fashionable and organically, and it seemed to be a free skill set to make this dream come true. But was set despite the good intentions and hard work, a curse of evil, unknown forces (increased timelines, lack of funding, and it seemed to be a growing list of insurmountable challenges). On strike of midnight, the once magical partnership that began slippers in good will and glass, resulting in a terrible situation, which resulted in the dissolution of a business partnership, and eventually their friendship.

I wish I could say that this story was false and not made from my personal experience as a partner in my first entrepreneurial adventure. Unfortunately, it is not uncommon story for those who start a business partnership. But by this vital learning experience, I can test new entrepreneurs offer advice before entering into a business marriage. Yes, I said marriage or end it is a legally binding contract that requires both personal and financial commitment this relationship works.

So before poo-pooing the meticulous task of the advantages and disadvantages of sketching a business partnership, take the time to consider the pros and cons. It may review your business needs reality.

benefits

Once established a business concept and willing to pursue, you must decide if you are willing to operate the business unit as a sole proprietorship or a partnership. The latter are to share the obvious advantages .:

• vision - "Two heads are better than one" boost creativity and expand your horizons

• roles and responsibilities - the timesharing things means more time to do to balance your business and life

• accountability. - A mutual personal investment requires each partner to take responsibility and support necessary to dig out of the trenches, when faced with certain challenges

• start Up. Capital -. Joint investment enables growth opportunity your business should be profitable, while sharing the risk mitigates the financial pressure during the startup phase and in moments of distress

Disadvantages

from a legal and personal perspective, may have financial consequences in the long term, the disadvantages of a partnership:

• financial Negligence - If your partner is carelessly, as he / she manages the finances of the company, then you can finance your partner negligence are held accountable; ie, you may have to dig into your own personal assets to repay debtors with more than your savings (car, furniture, home).

• termination of partnership Think about what happens if your partner wants to separate the business relationship, and brought in as new partners -; or if something should happen with your partner, what steps must be taken to carefully review the dissolution of the partnership manage

• completion of the personal relationship -. Mixing business with close friends or family members can as the ideal choice appear when put your trust in a partner. However, when financial burdens and personal differences come into play, put your personal relationship at risk.

The Partnership Agreement is

With a business plan and all partnership considered advantages / disadvantages important to get into a partnership agreement. This sets legally from the specificities of each partner functions, assets and shares (if any). In addition, an appropriate exit strategy should the business be considered as should not / be financially profitable, due to lack of capital or pending bankruptcy, in which case it must be determined how losses are divided.

Make sure you have a good lawyer who can help you through this process, as most of us are not fluent legalese and the help of a lawyer must avoid disagreements, misunderstandings and disputes.

note that if you and your partner your business properly prepare for a successful outcome, then your fairy tale could come true easily.

For more information please call Small Business BC Launch verify your business checklist.

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