| When two, three or even more people come | | | | regulations, company size requirements, and |
| together to starting up businesses , it is | | | | limited financing options in the future, |
| called a partnership. There is more legal | | | | depending on what type of incorporation you |
| paperwork that needs to be taken care of in | | | | choose. |
| this type of arrangement than there would be | | | | |
| with a sole proprietorship. Each partner | | | | As tedious as it sounds, all the provisions |
| needs to be aware of his or her own level of | | | | of your company's organization will have to |
| liability, as well as the repercussions of | | | | be decided early on, particularly since |
| walking away from the partnership. Sit down | | | | liability laws are so stringent. Furthermore, |
| together and work all of these details out so | | | | you'll want to make legally binding contracts |
| that they don't become sticky issues later. | | | | among your organization as detailed as |
| | | | possible, for no matter how close you are to |
| It is important to note (for above) that you | | | | any partners, the chance of a parting of ways |
| have sure that there is an equal balance of | | | | is ever present. In the end, realism is the |
| power and that everyone is comfortable within | | | | key to finding the right type of organization |
| their own role. Most importantly, get it all | | | | and should be applied to this important |
| on paper so there is always a document to | | | | decision. |
| refer back to if there should ever be a | | | | |
| disagreement. | | | | Even though it's not the fun part of starting |
| | | | your own business, it is important that you |
| A limited partnership works much as a | | | | get these steps completed as soon as |
| partnership, though there are a few key | | | | possible. When developing legal documents, |
| differences. The first is that partners, as | | | | you will want to remember to be as detailed |
| either investors or advisors, serve under the | | | | as possible in order to protect your own |
| same rules as a partnership, but not all | | | | interests if there should ever be a conflict |
| partners are equally liable in a legal sense, | | | | between yourself and other involved parties. |
| though at least one partner must agree to | | | | Staying grounded and making wise decisions |
| take the unlimited legal liability attached | | | | will allow you to focus more on the business |
| to a sole proprietorship. | | | | once things really get going. |
| | | | |
| The second is that partnership agreements | | | | While you may be anxious to get into the more |
| include clauses that provide for a return on | | | | exciting aspects of entrepreneurship, don't |
| any investments made into the start-up, which | | | | neglect the legwork that needs to be done to |
| can be a good way for start-up businesses to | | | | get you started on the right foot. Make sure |
| get the beginning funds they need. This rate | | | | that your legal documents are in order and |
| of return is chosen at the time the agreement | | | | are as detailed as possible to avoid ant |
| is made. For this, it is best to consider to | | | | technicality in any consensus that you have |
| choose to start up small businesses type. | | | | agreed upon...with your clients, business |
| | | | partners. |
| Finally, there's the option of incorporating | | | | |
| your start up, effectively turning your | | | | Documents from any transactions should be |
| company into a legal entity separate from | | | | organized to avoid possible problems that may |
| owners and employees, at least in terms of | | | | arise among the people mentioned.. This will |
| legal liabilities. This protects your assets | | | | help insure that you and your partners are |
| and, even better, can be done on your own. | | | | able to work through conflict and |
| | | | disagreements, as each will be assured that |
| However, there are multiple kinds of | | | | their own interests have been protected as |
| incorporation that a company can become, and | | | | much as is possible. |
| each one is held to different rules and | | | | |
| standards by the government. Some possible | | | | Those types presented above have given you a |
| drawbacks include increased cost, tighter | | | | significant ideas for start-up business. |