There are some extra benefits in partnership business. Such as, sharing capital, risks, manpower, creating ideas. It allows all partners to contribute to the business all over the way. There are basically two types of business partnerships called General Partnership or Limited Partnership. As we know, limited partnership owners can only provide the funds to the business where general partners can operate and share the risks and liabilities. As per most country’s law, limited partnerships require some legal papers that are time-consuming so people usually tend to enter as a general partnership in any business.
In today’s post, we will see which things to consider before adding a new partner to the business.
1. Ask Yourself Why You Actually Need Business Partner
If you are looking for investing money for your business you can go with a limited liability partnership or if you are trying to share full profit, risks, and business taxes then the general partnership would be a good suggestion for you.
2. A Clear Concept About New Partner’s Financial Status
Before entering a new partner to the business you must need to know about their current financial condition. It is strongly suggested for you do not welcome anyone who has not enough finance for investing also do not allow investing full capital on the installment basis.
3. History Check For Experience, Transection, and Fraud
If your new upcoming business partner is new then must check his / her background to avoid any future occurrences. Such as business or job history, the reason for leaving previous business or job, business experience, trust level on money transection, and criminal records.
4. Clear Concept About Legal Options For Partner
Get a clear opinion and agreement paper sign by your new business partners. Tell them about your partnership conditions in a legal way. After signing the agreement paper must notary or register it to run the business without any future partnership hassle.
5. Written Business ToC For New Partner
Before welcoming new partners, it is quite important to tell them about your business terms and conditions in the stamp paper in writing format. It should not be based on personal relationships. Each and every term and responsibility should be clearly defined and should be maintained.
6. The Commitment Power of Business Partner
Each business partner’s commitment should be solid rock. You need to understand the commitment depth level of your new partner in every way. The best way to see the business commitment level of partners is to look at their effectiveness on each work from the first day of joining.
7. Partnership Leaving Options
In your business terms, there should be an option on what to do and how any business partner can leave the partnership. Some questions will arise if any partner leaves... They are
• How other partners receive risks and profits?
• How new capital will be invested?
• How will the responsibilities divide?
• When and how will a new partner can join in?
• Will any existing partner take the leaved partnership?
8. Salary, If Any Partner Work As An Employer
Set a limit of salary on a monthly basis if any partner is positioned for any business operations. Such as CEO, Director, Manager, Marketing or something else.
9. New Partner’s Business Interest
Before entering a new business partner it is essential to check his / her overall interest in your business. Otherwise, the new partner’s attitude on your business will be light and visionless which is harmful to your business.
10. Overall Business Mission and Vision
The overall business mission and vision of all partners will be the same. Partners who share the same values, mission, and vision to run the business operations, strategies will gain long-term business success in the future.
Conclusion:
No doubt business partnership is a great way to distribute business risks, liabilities and increase total capital to large the business. So, to make any partnership business successful it is quite essential to find the right business partner. Be aware of the topics that I share in the article as the primary concern. Remember, selecting a bad partner can ruin your entire business kingdom or can lead to you a financial problem or loss that you cant recover ever.
That's all for today. Hope you enjoyed this post. Please comment below if you want to say anything. Stay very well and Allah Hafez.
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