In the running of the day to day activities and movements all around the world in pursuit of profit,gain,valueable stuffs and things that are so dear to us, just like the business world. A sole proprietor running a business in pursuit of profit, perhaps he can't move alone or his business is not moving to the right direction the sole proprietor and individuals who had not been into business for the fear of bearing risk and loss alone may go into partnership.
Partnership is the relationship which subsist between two or more individuals with a minimum limit of two(2) members and a maximum limit of twenty(20) or more base on their agreements. This partners will agree unanimously to run a define business accepted by law with a view of making profit and sharing the profit among themselves in accordance with the agreed sharing ratios. As a sole proprietor or one man business goes into partnership business, there must be a reason and aim of his change of business class.
Reasons For Partnership Business
.Capital expansion
.Profit expansion
.For greater effeciency and productivity
.For maintenance of relationship
.sharing of risk
Formation Of Partners
when two or more individuals who are not into business come together unanimously to run a business with a view of making profit and sharing profit in accordance with the agreed sharing ratios.
An individual who is running a sole proprietorship business decide to invite another individual who is not in business to run an enterpreneurship together with a view of making profit and sharing profit in accordance with agreed sharing ratios.
When two or more individuals, each of them running a sole proprietorship business, unanimously to almagamate their independence inorder to run a define business with a view of making profit and sharing it accordingly base on the agreed sharing ratios. In the case of sharing of running partnership enterpreneurship there are different kinds of partners who has their own specific part or role to play in running a partnership business this types of partners are:
.Active Partner is a partner who contributed capital and also agreed to participate in the day to day running of the business.
Dormant Partner is a partner who contributed capital but do not take active part in running of the business.
Quasi Partner this is the partner who allows the partnership business to use his name or title to run the affairs of the business but did not contribute capital and therefore he is entitled to the share of profit.
Limited Partner is a partner who is always liable to the amount of capital contributed in case of liquidation. In all cases of partnership there must be atleast one imited partner, this type of partners will only contribute the same amount which they conributed at the begining of the business life. For example, if Mr A,B,C&D are in partnershiip and they contributed $20,000 each, if Mr D, is the limited partner among them it means that if the business falls into trouble or debt of $1,000,000 Mr D, can only contribute the same $20,000 which he contributed at the begining of the business.
Individuals coming together to go into partnership business, there must be an agreement between them or partnership deed, this is a document that contains sets of rules and regulations or principles also known as partnership constitution, design specifically the relationship that will exist among the the partners and between the partners and the partnership business and also the operational activities of the business.
Content Of Partnership Deed this is the agreement between the investors of this business to go into partnership and they have all come into one agreement and conclusion and therefore the content of the partnership will be let known to every member of the partnership business. Like: 1. Name of the business 2.principal place of the business, known as address 3.Nature of the buisiness 4.Capital contribution 5.sharing of profit and loss 6.Issue of drawing 7.Interst on drawing 8.Interest on capital 9.Interest on partnership loan 10.Interest on partners current account balance.
As an individual or sole proprietor who is facing problems in his/her business because of the stress in running of the business or the need of large capital to enlarge the business, check around and go into a partnership business and before going into a partnership business, examine their sales and their out puts if it is favourable for you to join and make profit. If you've been a sole proprietor for a very long time and your business is not experiencing profit, why don't you look for a good partnership business around and invest, to less your stress and elevate your profit, partner!
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