Business Ideas Problems one need to know before setting up a partnership

[Mastergp]

Many people engage in partnership business in our environment and when we talk of partnership business we see it as a type of business organization in which two to twenty person agree legally to set up and manage a business outfit with the sole aim of making profit.

A partnership business may be established without any formality although the partners have certain unavoidable obligations to the third parties, they may make such agreement between themselves in respect of the internal management of the firm.

Some the problems include the following:

Unlimited liability:
The partners are liable for the debts of the partnership business up to the full extent of their estate.

Inability to Raise up sufficient capital:
Partnership cannot invite the public to raise capital. Members of the public are always afraid to invest because of its unlimited liability.

Difficulty in management:
Since all partners will want to contribute his own quota, decision-making may be slow and long.

Limited growth:
The growth of the partnership will be limited to the managerial ability of the partners.

 

[Holicent]

There are many personality traits that can make or break a partnership, but most fall into two categories: "Rational," and "Irrational." In this post, we'll lay out some classic examples of behaviors in each category and how they might apply to your partnerships.

Rational Behaviors
- They know their strengths and weaknesses, and are willing to admit when something is beyond their ken.

- They have a strong work ethic.

- They are willing to be flexible with their business plan.

- They understand that you're coming from a place of wanting to help them succeed, and not just trying to take advantage of them.


Irrational Behaviors
- They're afraid of failing.

- They have unrealistic expectations about what you can do for them as partners (e.g., thinking you'll give them all your resources without any input from them).

- They don't listen when you tell them something doesn't make sense or isn't feasible—they just keep talking over you until they've convinced themselves it will work somehow.

 

[Richee84]

Partnership form of business have certain problems that can not be avoided but only manage and it is better to be aware of the kind of problem it has before going into it fully.

Disagreement and misunderstanding will come or happen to partners during the course of doing their business together. Partners must have it at the back of their mind that misunderstanding will definitely come and so therefore they should try to have a written partnership deed that will help them resolved most of the disagreement.

Partnership deed is a document written and to be sign by all partners after spelling it out in the partnership deed how the business should be run and the apportionment of both capital and profit to each partner. The ratio of capital contributed by each partner and to the profit that each partner will be collecting.

How the company will be manage and run on a daily basis and the role of every partners will be spell out in the partnership deed to avoid future unnecessary argument on it.

Delay in decision making is one of the attribute of a partnership. Since all partners know that to reach and take decision usually use to be delay then they can find a way to hasten there decision making.