Partnership

This information came from the State of New Jersey’s Web site. Check with your accountant, lawyer or small business advisor for the most current information or changes to the tax law for this type of business organization.

In a partnership, the liability of each general partner for all the debts of the firm is unlimited and both parties are personally responsible for all the debts of the business. The amount could be in excess of the amount invested in the business.

A partnership lacks continuity – the business terminates upon the death of the owner/partner, or upon the withdrawal of a partner. Some situations call for a limited partnership (Refer to the NJ State Statured--N.J.S.A 42:2a).

There are several factors to consider when evaluating whether to take on a partner:

- Financing. It is the owners’ responsibility to provide, or obtain from others, sufficient money to establish a firm foundation for the enterprise.

- Missing technical or management skills. You can obtain skills you are missing through a business partner.

- Base your decision on logic and not on emotion. Look at compatibility, personality and character, as well as the ability to render technical or financial assistance.