In Business With Your Buddy

Getting Started

Choosing whether you want to take on a partner as part of your business, as well as who that partner should be, is one of the most important decisions you will make for your company. A partnership, like any business arrangement, has its advantages:

  • Shared ideas, capital and resources may offer a stronger base for business success.
  • Profit or loss may be divided however the partners choose.
  • Partners declare their share of income on their own income tax returns.

And its disadvantages:

  • Partners can have personality conflicts.
  • All partners are responsible for debts of the company.
  • All partners are responsible for any negligence.
  • If sued, partners can lose their personal as well as business assets.

Although a written partnership agreement, like the one Liu, Hsu and Gao share, is not legally required, it's always wise to get things in writing. A good place to start is with the Small Business Administration. You can call the SBA Answer Desk at (800) 827-5722, or visit the SBA Web site, where you'll find helpful tips on starting a business as well as links to your state's Web site. Go to it!

Next Step
  • Think you and your friend/potential partner have what it takes to be successful entrepreneurs? Take this quiz at YoungBiz.com to find out where you stand.
  • What's it really like to be in business with a friend? Find out what it was like for these entrepreneurs.
  • Summer camp is a great place to learn how to become a teen entrepreneur. Visit YoungBiz Camp Central for more information.
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