Tag Archives: Joint Ventures

Partnerships vs. Joint Ventures

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Partnerships vs. Joint Ventures

A partnership is a business made up of two or more co-owners that contribute resources, share in financial gains and losses, and are individually responsible for the actions done within the business. Individuals interested in forming partnerships must consider the pros and cons of a partnership before they enter into any contractual agreement. Partnerships come in two types, general and limited.The most appealing aspect of joining a general partnership is its simplicity in structure. A general partnership does not require any specific rules to form. The co-owners all have direct control within the business and can make binding decisions with a simple majority vote. If not stipulated in a written agreement, any profits made among co-owners are shared equally by default. The greatest advantage of being apart of a general partnership is that each co-owner is taxed separately on their share of the business’s profits.A limited partnership consists of both general and limited partners. General partners own, run and assume liability for the business, whereas limited partners serve only as investors; they have no control over the company and do not assume the same liabilities as general partners. Depending on the individuals and circumstances involved, partnerships can offer many benefits: