Yes. A partnership can be for two or more people, however only those partners over the age of 18 are legally bound by the terms of any partnership agreement.
Partners are referred to as members of a partnership.
Can there be different types of partners?
Yes. There can be general partners, sleeping/dormant partners and even companies can be partners.
- General partners. A general partner is one who invests in the business, takes part in its running and shares in any losses or profits the business makes. Every partnership must have at least one general partner.
- Sleeping partners. Sleeping partners invest in the business and share in any profits or losses, but do not take any part in running the business.
- Sleeping partners are often friends or relatives who invest in new business ventures, for example putting up some capital to purchase a business, stock, premises etc. The important thing to note about sleeping partners is that although they do not take any part in running the business, they are still legally jointly responsible for any business debts and losses.
- Companies. Companies can be partners in another business. They share the same rights and responsibilities as other partners, however will be responsible for additional tax matters and reporting obligations.
Related posts:
- Must Know Deed of Partnership A deed of partnership is a legally binding agreement between...
- How to Handle Tax in Your Company! You must contact the Inland Revenue and inform them that...
- Build a Partnership Business Type This is a similar identity to that of a sole...
- Limited Liability Partnership You can also form a limited liability partnership. To do...
- Being a green business is good for business (I) Running a successful business certainly covers a lot of ground....