CARTOONS BY CHRIS BRITT

– PARTNERSHIPS –
Partnerships leverage
the power of two or more.
Basically, a partnership is an
agreement between two or
more people to own, finance
and operate a business. This
is a legally recognized entity
where all profits and losses
flow through the company to
the individual owners at tax
time in proportion to their
percentage of ownership.
However, each partner is
liable for the other’s actions
within the business.
When you’re in jail, a good friend will be trying to bail you out.
A best friend will be in the cell next to you saying,
“Man, that was fun.”
There is a lot to think about before entering into a partnership. Each general partner
has a set amount of responsibility and authority to run the business, depending on the
percentage owned. Most business experts caution against a 50/50 partnership as it can
end up in some tense, coin flipping moments. And remember, one partner acting on
behalf of the partnership commits the entire partnership to an agreement or contract.
HOW DOES IT WORK?
Setting up a partnership is pretty straightforward and is similar to setting up a sole
proprietorship. That said, it’s a good idea to spend time defining the roles, responsibilities,
authorizations and terms between partners in writing before you form the partnership.
Legal advice is always a good idea.
45