What Is A Partnership | California State University, Northridge

University:
California State University, Northridge
Course:
BUS 104 | Introduction to Business
Academic year:

2023
Views:

416

Pages:

1
Author:

JJIssac

WHAT IS A PARTNERSHIP? A partnership involves two or more individuals coming together to operate a business as co-owners and share any profits. It's governed by the Partnership Act. A written agreement called a "partnership deed" outlines each partner's role and stake. Partnership Features Partners jointly provide capital from personal savings or loans. One partner's actions legally bind the others. Profits and losses split according to the deed. Unlimited liability means each pays debts from their own money if needed. Forming a Partnership No major paperwork is required. A simple verbal or written agreement can establish it. Registration adds name protection advantages. Capital Sources Contributions kick things off alongside optional borrowing from friends, banks, government agencies or creditors. Profits also fuel continued functioning over time. Types of Partners Roles vary from active daily managers receiving pay to silent backers simply lending their name. Liability splits between general and limited partners too. Minors' involvement relates to reaching adulthood. When Partnerships Work Well Larger capital pools suit capitalintensive industries like manufacturing or construction. Professions needing many skilled individuals like law and healthcare jointly achieve more. Not being corporately organized also guides some fields into this structure. Strong cohesion predicts stability. Emerging Trends Rather than working entirely solo, more family members, companions and professionals choose partnerships to mutually support their goals these days. Multinational regulations often dictate mixed local-foreign teamups as well. Overall, this flexible corporate alternative remains quite prevalent.