When two or more people come up with ideas and investments, that’s when a partnership starts. Now there can be various types of partnership depending on the aims and objectives of the company or a particular assignment. So there are multiple types of partnerships, and here’s a list of a few of them:
- Partnership by will: When more than one person dwells into a firm’s partnership, they first decide its purpose. So, in this case, if there is no such limit on the tenure of the alliance, then that has no closure time, and the partnership exists on the will of the collaboration.
So when any one of the partners wants to quit, they can. This is a risky partnership because there’s no agreement to this partnership, and it is completely open-ended. So if any partner finds it difficult to sustain in the firm and serves a notice, the entire partnership will dissolve, and no one will have a say on it.
- Work specific partnership: Some of the assignments that a solo firm takes up, knowing that they will not be able to perform it all by themself. So, when they take up those kinds of projects, they are open to collaboration. Like web designing firms like Justgoweb Shopify development, when they take up the work, they seek partnership. That kind of partnership has a limited time, and when the deadline is received, they leave the project. These kinds of partnerships have an agreement signed by the firms working together or individuals working together.
For instance, if yours is a digital marketing firm and you have other branches of work like Content marketing, social media marketing and website development as well. So suppose there’s a big project that you get regarding the website development of a company, and you know that you can’t do the whole project alone. So, in that case, you will pair up with some other website developing company like Shopify development for that particular project. The work and ways of work will be divided amongst the two companies, and when the project is handed over to the client successfully, then the contract for that project will end, and along with it, the partnership that was project-specific will also expire.
- Dormant partnership: Few business ideas cannot be started as an individual firm. You will need to register yourself as a partnership firm, be it for the tax policy or because of the rules. So, when such a firm is set up, few partners just stay as names and have no work to do. They can also be regarded as sleeping partners.
This means that just one person does the whole job, and the rest have no role to play except for signing the papers. Well, it is risky to choose such a partnership because the person who gives his name to the firm is liable to ask for profits without doing anything. At the same time, he shall not be responsible. When for any company problems as he isn’t a working partner.
- Sub and minor partnership: Here, the only contract that the partner has is to claim over the profit by a third party. These kinds of partners have no rights and cannot give their advice in decision making either. Minor partners are only in the firm to enjoy the benefits while having nothing to do with the problems the firm faces. These minor partners are not only capable of sharing profits.
Decision making and holding the aims and objectives up for a firm is complex. So, the firm decides what type of partnership will be suitable for them and then works accordingly. Getting a partnership is easy but maintaining one because of differences that emerge as a problem for a company is the challenging part. But there are risks in partnership also that cannot be forgotten. So while choosing a particular type of partnership, you will have to consider both the advantages and disadvantages.
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