What is a partnership?
A partnership is a form of running a business in which there are two or more persons involved in the ownership. This means that there is a written contract between the parties and this deal needs to be signed by all. This contract has all the terms and conditions on which the relevant parties have given a green signal and decided to work together for their united benefit. In fact, this deal also has important details such as the extend of ownership or each partner, their roles, the investment that they are making, their role in getting their share of the profits and also the extent to which they are liable for the company. Since everything is so crystal clear, it is absolutely no surprise at all that it is one of the most preferred means of running a business.
Reasons why you must opt for a partnership in business.
- Divided risk: The best advantage of the partnership is that risk is divided. This does not mean that everything in the firm is bound to always go well. But, this means that in case of any issues, you have someone to support you and be by your side. Divided risk means that no one person is held responsible for any loss or issues. Since it is a partnership, it is believed that is a united team effort and that is why everyone is equally responsible for whatever happens.
- A number of views: I am sure that you know this already that every mind is unique. This means that more the number of people working together, more bright ideas are likely to be placed on the table. Due to the psychological existence of individual differences, people also have different ways of functioning and getting things work done. The best part about a partnership is that you get the benefit of this. With so many suggestions and creativity pouring in, you can ensure that you have the bets company which caters to a number of needs at the same time.
- Quick decisions: Though you may feel that a sole proprietorship is the one that helps to take quick decisions, it is actually a partnership. This is because in case you are not there or you are busy with some other work, then your partner can be trusted to take a sound decision on your behalf that he thinks is best for the firm. Definitely, your partners that you pick need to be well versed with their work and should possess a high level of expertise and knowledge in the field. Thus, this helps you to know that work is not getting delayed just because of one member in the management.
- Large capital: Lastly, a partnership is chosen by a lot of people because there is the possibility of a large capital. This is because with multiple owners, they all get their own set of investment and investors. This is limited in case of one person. But, the moment two or more people join in, it gets multiplied.