Small Business Tips and Tricks: Partnerships

hello and welcome to our first segment of small business tips and tricks brought to you by the Niagara Falls small business enterprise center my name is Angela Davidson and today

we’re going to talk about partnerships there are three forms of business ownership in Ontario a sole proprietorship a partnership and a corporation

a partnership is where two or more people create a business and work together in that business to carry out businesses operations there are a few pros and cons to partnerships that I would like to share with you today a couple pros are you can share the cost of startup so start starting a business is normally quite an expensive venture you can share these costs with

your partner or partners shared responsibilities and work you are not solely responsible for the operations and the day-to-day business that you might have to deal with you can work with these other people and share that type of responsibility with each other you can also keep each other motivated and excited to go to work every day you also have someone or a couple other people to share risks and expenses with there are a lot of promes to business partnerships however

there are also quite a few cons that I’d like to chat with you about today partners in a general partnership are usually responsible for if there’s two partners in a business they would each be responsible for fifty percent of that business if one partner disappears that responsibility would be placed on the partner that would be still located in the city and that person would basically be responsible for a hundred percent of business you also don’t have total control over the business when

you’re operating a partnership you do have to collaborate and compromise and work together to find the best options for all a friendship may not survive a partnership and we don’t highly recommend that to friends go into business together because normally

it can cause problems the one best way to decrease these risks of a partnership is to hire a lawyer and create a partnership agreement a partnership agreement can legally set out what is capable and not capable to be done in a partnership and what happens if one of the partners either decides to leave the business possibly passes away or decides that they would like to do something else if you don’t put a partnership agreement together

you are at risk of being liable for a hundred percent of your business whether or not it’s profitable or extremely unprofitable and it’s not something I recommend doing please stay tuned next week for another segment of tips and tricks from the Small Business Enterprise Center and if you do have any questions regarding owning and operating a small business please don’t hesitate to contact us at the city of niagara falls thank you