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Partnership
A partnership is an official and corporate agreement between the people and companies who equally own a business or empire. These parties are bound by the legal contract and have share in the losses and profits of the company depending upon the type of their partnership.

Partnerships have legal security and they all are done on legal papers which can be provided as proof when a clash occurs among partners. It is not necessary that partnerships are based on equal divisions; partners can have different owning proportions in the company.

Partnership can occur between more than two parties and all these parties have their interfering rights in the strategic corporate business according to the share they hold in that company. The partner who has the most influential partnership as he who has the highest shares act as the chair person of the company or the managing director, depending upon the official structure of the company. He have the right to take most of the decisions about the company and all other share holders give their views and usually have the power of Veto if they own 50% of the shares.

The partnership is more strong and reliable if all the partners are in continues contact and take part in important decision making. All over the world the terms of partnerships and the laws securing them are nearly the same.

In a partnership all the partners share the responsibility, work force, expenses, losses and profits. Partnerships are basically of two types which are discussed here to provide you an idea.

  • First type is the limited partnership; the partner has charge of the business but in limited terms as it depends upon the partnership ratio. If it’s limited then the rights or charge will be limited as well. The responsibilities of the limited partnership are also less. But all the partners in an organization can not have limited partnerships.
  • Then comes the; general partnership, the status of general partnership in an organization is very important as it has an important part to play. The one with the general partnership has the most rights and is in charge of the management decisions. But the profits and losses an organization earns are shared both by limited partners and general partners. General partnerships occur between two or more individuals and they assume the equal rights in the management of business. If the business goes in loss each general partner owns the full responsibility. Though this is a little risky but they do get the advantage when it comes to tax. The tax rates for them are lower because they are taxed individually not on their business.
Partnerships are usually beneficial for the business, many people get involved, assume responsibilities and add up their assets in the business, which can provide a new boost to the business.