partnership

Examples of partnership in the following topics:

• Pros and Cons of a Partnership

  • The partnership structure has the benefit of simplicity and control but the drawback of personal liability for the partnership's activities.
  • The partnership is one type of business structure.
  • This means that the partnership structure is only as good as the partnership at the relational level.
  • If the mutual consent to form a partnership breaks down, the partnership breaks down as well; partnerships are considered to be an aggregate of their partners rather than a separate entity.
  • Types of partnership beyond the general partnership have developed to mitigate some of the disadvantages of the structure.

• Partnerships

  • There are two types of partnerships: a relational and strategic partnership.
  • A relational partnership is a partnership that develops on the premise of a close, personal relationship built on trust (Mohr, 1994).
  • A relational partnership is more similar to a friendship than to a market exchange.
  • If this ideal is applied, a strong foundation can be formed through relational partnerships.
  • An example of a strategic partnership was evident in 2007 when Time Warner's AOL strengthened their strategic partnership with Google.

• Advantages and Disadvantages of Partnerships

  • Partnerships have certain default characteristics relating to both the relationship between the individual partners and the relationship between the partnership and the outside world.
  • Each general partner is deemed the agent of the partnership.
  • However, in a partnership of any size, the partnership agreement will provide for certain electees to manage the partnership along the lines of a company board.
  • Partnerships are relatively easy to establish; however time should be invested in developing the partnership agreement
  • As in sole proprietorships, partnerships have unlimited liability.

• Types of Partnerships

  • For the purpose of this discussion, the most important types of partnerships to consider are general partnerships, limited partnerships, joint liability partnerships, several liability partnerships, and limited liability partnerships.
  • This represents a default version of a partnership, which governs the relationships between the individual partners as well as between the partnership and the outside world.
  • Finally, there are limited liability partnerships (LLPs).
  • When considering the appropriate type of partnership, liability is the key word.
  • Differentiate between partnership types, and recognize the key role liabilities play in these partnerships

• Partnerships and Taxes

  • Various partnerships need to file different tax forms; it is important to understand the IRS codes before embarking on a partnership.
  • Different types of partnerships have different tax requirements, and partners will need to fill out different forms depending on the type.
  • It is designed to provide the limited liability features of a corporation and the tax efficiencies and operational flexibility of a partnership.
  • Formation is more complex and formal than that of a general partnership.

• Forms of Business Organizations

  • A partnership is a business owned and managed by two or more people.
  • Partnership is defined as general or limited liability.
  • Under a general partnership, all partners become liable for the partnership's debts and obligations.
  • On the other hand, general partnerships do not have this protection.
  • Usual partnerships are accounting and law firms.

• Partnership Agreements

  • Partnership agreements govern the relationship between the various individuals who are collaborating on a given venture.
  • Similar to a sole proprietor, a partnership shoulders the majority of the risk when opening a new venture (unlike limited liability models).
  • For example, let's assume that a startup company decides to formulate their business as a partnership between four people.
  • Here are a few common components of partnership agreements:
  • Recall the more common components of partnership agreements, and recognize why these agreements are valuable

• Phases of relationship development

  • Strategic partnerships experience four major developmental phases and Exhibit 36 represents the life cycle of such a relationship.
  • Partnerships can have various types of relationships; some areas may only need to be functional, whereas others may seek to be strategic.
  • During this phase, parties engage in exchanges to explore potential partnership costs and benefits.
  • After both parties prove that they are capable of performing as needed, the partnership will move to the expansion phase.
  • The dissolution phase is the decision to end the partnership.

• Marketing exchanges and partnerships

  • In 2005, Barton A Weitz, Stephen B Castleberry, and John F Tanner published their book "Selling: Building Relationships" in which they discuss many of the aspects of modern business relationships, including market exchanges and partnerships.
  • A partnership, conversely, is based on creating a mutually beneficial affiliation for both of the organizations.
  • Market exchanges and partnerships both generate commercially oriented connections, which classifies the two relationships as external (Weitz, Castleberry, and Tanner, 2005).

• Foundations of successful relationships

  • Trust, however, is only one building block of several involved in the creation of strategic partnerships.
  • In order for a partnership to be successful, trust must be mutual.
  • Proposed partnerships perceived as contrary to the existing structure or cultures are candidates for enhanced scrutiny.
  • Once a partnership is entered into it is necessary to develop programs such as training and rewards to establish the desired partnership behaviors.
  • Thus, it is important to evaluate the level of intrinsic gain that has been established through the partnership.