General Partnerships Generally

Before drilling down into the money aspect of finding a partner, it is important to first understand the other characteristics of having a partner because they are not insignificant. A general partnership is the union of two or more people to carry on a business for profit. Partners have equal say in the business, and importantly, equal liabilities for it as well. Decisions should be made jointly, but legally can be made individually. Trust is required to make a general partnership work effectively. In fact, when a partnership works, the results can be great, as in the case, mostly, of Marty and Phil. But when they do not work out, partnerships can be disastrous. Unfortunately, my dad and Phil never spoke again after their partnership ended.

So yes, there are pros and cons. It is a choice that needs to be analyzed carefully. Does having someone who has the money outweigh having that person tell you what to do? Only you can decide. The first thing to appreciate is that, like the business marriage it is, a partnership is both a legal and an emotional commitment. You have to be in agreement and compatible on both levels.

Here are four tips to making any partnership work:

1. Test before you buy. A general partnership is, first and foremost, a legal arrangement. For instance, did you know that your partner could take on debt in the partnership's name and not tell you about it, and yet you would still be liable for it? That's true. As I said, it is legally ...

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