Question: I want to expand my business by bringing on a business partner – is this a good idea?Answer:
Yes. One way to expand your business is by bringing on a business partner, forming a partnership. A partnership is defined as an association between two or more parties who wish to enter into business together in the form of a partnership. Benefits include that partnerships can be easy and inexpensive to set up and operate, and that partners are not employees who must be paid a regular salary and superannuation. Partners add value to a business, as they are able to bring on their expertise, experience and capital. One disadvantage of a partnership is that you are liable for the debts of the partnership, meaning that you’re legally responsible for the actions of other partners.
Partnership laws govern the partnership, a Business Lawyer can advise you on this. If you form a partnership, it is a good idea to have a partnership agreement to set out the terms of the partnership, including the purpose of the partnership, details of the partners, rights, responsibilities and obligations of the partners, how profits and losses are to be divided and how long the partnership is intended to operate.