Partnerships are among the most common forms of business relationships. A partnership is an agreement in which two parties, called firm partners, agree to collaborate to advance their respective interests. Partnerships can be short term or long term and may involve only a few partners or many. A partner can be a person, a company, an organization, a group or an interest-based organization.
Partnerships may be voluntary or not. Voluntary partnerships are relationships in which neither party benefits directly from the partnership. In such partnerships, both parties share in the partners’ profits. On the other hand, voluntary partnerships may end because one or more of the partners find it difficult to continue the partnership’s existence, or the partners’ personal interest conflicting with the interest of the other partner.
There are different types of partnerships. Examples of these are general partnerships, joint venture partnerships, limited partnerships, investment partnerships, insurance partnerships, outsourcing partnerships, free trade partnerships, and environmental partnerships. General partnerships improve the efficiency of international trade by removing cost barriers that impede trade. These partnerships encourage foreign companies to move their manufacturing operations to the country with the lowest labor costs and thereby boost employment in the United States, boosting the economy.
Limited partners enjoy certain privileges that do not apply to limited partners. Limited partners have limited liability. The only limit is the extent to which the limited partner is able to disburse its share of the partnership’s profits. Also, limited partners enjoy the convenience of having their name appear on the partnership’s capital. This allows the limited partner to control the use of its personal assets.
Mutual interests are among the most common reasons for forming partnerships. Partnerships in mutual interests refer to those partnerships that are designed to enhance and support the economic welfare of all of the partners. Examples of mutual interests partnerships include charitable enterprises, cooperatives, and investment partnerships. Some countries have legal traditions that support the formation of partnerships. In Canada, for example, all businesses incorporate within the Canadian Business Corporations Act.
All corporate bodies need to register a trademark in order to protect their names, marks, and logo from misuse. Such registration is done by the Canadian Trademark Office under the Protection of Ownership and Professions Act, sections 7 and 8. Partnerships in mutual agency are among the few ways an individual can protect his or her rights as an intellectual property owner. This is because partners who own the partnership firm can enter into a securities agreement with one another, thereby providing the funds necessary to settle the debts of one partner if that partner is bankrupt.