pros and cons of partnership for $$$

[LivingAlmostLarge]

Have you ever invested with partners in something? What did you invest in and how did it turn out? Pros? Cons? Would you do it again or did you?

[myrdale]

I've never been in a partnership, nor have I ever owned a business, but a few thoughts from the outside looking in:

Pros
Increased initial start up capital.
Increased experience.
Shared work loads.

Cons (examples)
A welding foreman is partnered with a mill wright. The foreman hires labor to do field work. The mill wright handles a machine shop. The foreman owns most of the business but finds out his partner has stopped coming into work and is stealing from him.

A guy, his father and stepmother have split ownership of a company. Very different points of view. It was a mess at times. Father sides with the stepmother 90% of the time.

Ultimately someone has to be capable of making decisions. Deadlocking on everything gets nothing completed. 50/50 can be a problem. But always my way and never your way doesn't work that well either.

Work has to be properly shared, assuming they aren't strictly and investor.

If they only invest 10% of the initial capital, are they entitled to 50% of all profits?

What happens if they die or worst yet get a divorce!

[~bs]

tends to be a lot more cons in a general partnership than anything else. Pretty much if anything happens or if 1 partner wants out, it can dissolve the partnership. that's why most businesses with partners actually choose a different type of entity that allows for business continuation in the event something happens.

a lot of fraud and corruption as well, you can think of the partnership as a financial marriage. your partner can steal all the assets and run away. or if youre not financially minded, he could embezzle money from the partnership slowly over years, and you wouldnt even know it.

[disneysteve]

I think a big problem with partnerships is when 2 or more people go into business together and decide that everyone is going to have an equal say in what happens. That's just a recipe for disaster because what happens when the partners don't agree, which is going to happen for sure.

In any business, there needs to be someone in charge, someone who makes the final decisions, someone at the top of the food chain. Look around. How many companies have 2 or 3 or more CEOs?

[~bs]

I think a big problem with partnerships is when 2 or more people go into business together and decide that everyone is going to have an equal say in what happens. That's just a recipe for disaster because what happens when the partners don't agree, which is going to happen for sure.

In any business, there needs to be someone in charge, someone who makes the final decisions, someone at the top of the food chain. Look around. How many companies have 2 or 3 or more CEOs?

that's a good point. It's bad enough when there's 2 parties, now imagine if there's a group of 10.

In business and in many other societal constructs, there is a leadership hierarchy. If you have a situation where everyone is "equal" and has equal input in all important decisionmaking, nothing would get done. Military, the same way, hierarchical structure.

[TexasHusker]

Pros: Shared risk, a false sense of security, and a shoulder to cry on.

Cons: A bunch.

I’d rather not do a business whatsoever than have a partner.

[Fishindude77]

If you pick the right partners that understand things need to be ran like a business and not anybody's personal checkbook it can work very well. I've been in close to a half dozen business ventures with partners and never had any serious issues.

The best thing about having good partners is that you can go away on a vacation, etc. without having to worry about the wheels falling off. Not so with a sole proprietorship. Also a good idea partner up with people with different skill sets so you compliment each other.

[~bs]

If you pick the right partners that understand things need to be ran like a business and not anybody's personal checkbook it can work very well. I've been in close to a half dozen business ventures with partners and never had any serious issues.

The best thing about having good partners is that you can go away on a vacation, etc. without having to worry about the wheels falling off. Not so with a sole proprietorship. Also a good idea partner up with people with different skill sets so you compliment each other.

True..... On the assumption, your "good" partner doesn't try to clean you out while you're on vacation. Because as you know, partnership assets are in both your names, and they have the authority to do as they see fit with the partnership assets. Clean out all the bank accounts, run up the credit cards, sell all partnership assets, and skip town? Yep. Personally, I'd rather hang a "on vacation" sign on the door, and still have a business to return to.

A partnership is a financial marriage. You should treat it as seriously as you would a marriage contract.

[Fishindude77]

True..... On the assumption, your "good" partner doesn't try to clean you out while you're on vacation. Because as you know, partnership assets are in both your names, and they have the authority to do as they see fit with the partnership assets. Clean out all the bank accounts, run up the credit cards, sell all partnership assets, and skip town? Yep. Personally, I'd rather hang a "on vacation" sign on the door, and still have a business to return to.

A partnership is a financial marriage. You should treat it as seriously as you would a marriage contract.

This is why you set up accounting checks and balances and run the business like a business. Real easy to do things like having all checks require multiple signatures, limit the size of bank transactions by one party, etc.

Frankly .... if you're worried about theft like that, shame on you for partnering with such an individual.

[MichaelDow]

pros and cons of partnership for

Hello All

I am a CA and we just took a 135i M Sport on trade. Very clean car with 71K on it. I am thinking about buying as a second car my main car is a 440i M Sport

Any pros and cons to consider? Is it a smart buy at 8K?