PARTNERSHIP

Partnership

Partnership

Part 1: Forms of Business Association

The choice of the form that best suits your business depends on several factors including the type of business, the number of people associated with the company, the amount of control you want in the business, the extent of responsibilities for others, your capital requirements, the tax laws and regulations and liability for the debts of the company (Shum 1991 p. 2). There are three legal forms of business organization that Ahmed, Julie and Timmy may consider:

•Ordinary Partnership

•Limited Partnership

•Private Limited Company

Ordinary Partnership

This is the simplest, most economical and easiest business association between two or more persons, making it a particularly interesting for small businesses. All you have to do is to register the name of your business to obtain a license and authorization of municipal zoning officials (Morse 2010 p. 141). However, the status of ordinary partnership has some disadvantages, such as:

From a legal standpoint, the company and you are one. The company is dissolved at the time of your death.

You are responsible for everything that has to do with the company, whether the management and daily operation of the funding.

You are personally liable for all debts of the company. For example, if bills remain unpaid, your personal assets like your home or car may be seized if legal action is taken.

Limited Partnership

Many partnership founders seek legal help to write an agreement which outlines the rights and responsibilities of each partner. Generally, each partner is responsible for all aspects of the business and must accept the consequences not only for his actions, but also those of his associates (Morse 2010 p. 221). He is personally and jointly liable for:

The total amount of all debts and obligations incurred in the name of the company by any partner, whether or not the obligation was ...