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According to US small business administration; a partnership is a single business where two or more people share ownership.

There are 2 basic forms of partnership in business

1) General partnership- in this form of partnership,each partner involved is liable for any debt incurred in the course of the business.

2) Limited partnership- in this form of partnership,there is atleast one general and one limited partner. The limited partner is a silent partner who invests money into the business but is not in any way involved in the running of the business. The limited partner does not share in any liability incurred by the business.

It is always advisable to follow practical and and legal steps to structure partnerships in business, this helps to define the role of each partner as well as makes them a responsible part of the business.

You can get a partnership agreement drawn and reviewed by a lawyer,the partnership agreement should cover

– The role and responsibility of each partner
– Contribution of each partners in terms of cash,assets,time,labour….
-The purpose of the business
-Ownership structure within the business
-Guidelines to admitting new partners or handling the withdrawal of a partner; exit strategy for any partner or dissolution of the partnership
-Buy-sell provision/ agreement ; in case of retirement ,death, withdrawal of a partner e.t.c
– Decision making and conflict resolution
– Financial arrangements  such as book keeping, cheque signing, bank account authorizations within the business
-Valuation of the business in case of death, retirement,dissolution,withdrawals e.t.c

 Partnerships in business (2)  will discuss what to look out for in a business partner.