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