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Business Registration – Partnership

 

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A partnership is defined as an association of two or more persons to carry on as co-owners of a business for profit. Sometimes articles are required and highly recommended ion by the partners into the business (whether financial, material or managerial) and generally define the roles of the partners in the business relationship.

A partnership exists when each member shares in the management of the business and has personal liability for the business debts and obligations. Each partner is responsible for the actions of the other partner(s). The partnership itself is the business that receives a GST/HST number not each partner.

Advantages of Partnership:

  • Shared financial commitment
  • Ability to pool resources, expertise and utilize strengths
  • Limited start up costs
  • Few formalities (mostly¬† applicable licenses)

Disadvantages of Partnership:

  • Partners are generally personally liable for business debts and liabilities
  • Each partner may also be liable for debts incurred by decisions made by, and actions taken by, the other partner or partners
  • Disagreements in management plans, operational procedures and future vision for the business.