Starting a business either on your own or with a group of people is certainly not something that you can take in your stride. There are so many processes, rules, and regulations to follow that halfway through you are wondering whether you are doing everything right. It is for this very reason that you should hire the services of a good consultant who could help you start and run your limited partnership for a couple of months, without any hassle. Apart from the huge list of mandatory procedures that have to be complied with, there are quite a few other bits and pieces that you have to think about when you start a partnership business.
What Is A Limited Partnership?
When there are two or more people who decide to come together to do a business, they have to go through the procedure of forming an entity that could be of any specific form. It could be a general partnership, a limited partnership, a limited liability company etc. In the case of the second one, the partners are liable only up to the investment that each of them has put in. Therefore, when you speak of a limited partner, he or she is liable only up to the extent of his or her investment into the firm. With a general partner, the liability is unlimited and hence it is a lot riskier than the other form of partnership.
Deeds And Documents
Whether it is a limited or unlimited partnership, it is necessary for the partners to enter into a proper agreement. This is a document that is binding on the partners and also one that has to be registered with the appropriate authority. This agreement is usually referred to as the Partnership Deed and lays down all the details of the business. It specifies how the operations will be, the roles of each of the partners, and also the profit-sharing ratio that has been agreed upon. Once this is deed is drafted, it is circulated to all the partners so that everyone is fully cognisant of what is contained in the agreement or deed. Another important feature of a deed is that it should also contain information on how disputes will be resolved, in case they arise.
All relevant documents will have to be submitted to a registrar of partnerships or to a competent authority in your respective states. Once this is done, the entity is ready to commence operations.