This is when two parties mutually agree to form an arrangement so that they can pursue a profitable objective; the intention to share in the profits as well as Losses. The rights and responsibilities follow. On this basis insist on a need for written contracts. Partnerships are to agree to do business with another. Examples are entities such as a body corporate, associations, and such like artificial entities. Sui generis, created by law to facilitate Commercial exploits.
We limit the scope of this write to partnerships. These merely suggest basic features of such an Contract. They are key point to consider when making or accepting business offers.
There are two types of partnership, limited liability partnership, and general partnership. Anything out of these does not necessarily amount to a partnership. The arrangement could be so labeled but it does not meet the legally thershold of a partnership. The following are the basic features of a partnership:
- Agreement between Partners. (Must meet all the formal requirements of a valid contract)
- Partnership in practice.
- Specific Business Motive
- Mutual Business practice
- Actual sharing of profit
- By two or more person
There are ‘variations’. For instance, salaried partners and other similar arrangements thereof all must first meet the basics of what constitutes a partnership to then add variations as may be preferred. In a way, truth from the lies. There is much more to what partnerships come about. As such, there are variations in the application of principles that are applicable therein.
