There are several advantages to taking on an associate business partner, provided that the partner is someone you can rely on, to contribute to the operations and management of your business.
In most instances, an associate partner will be different from a general partner. An associate partner may be an equity or a non-equity partner and may take part in the management of the company, or he may not, depending on how you structure the partnership. There is no overall definition of what it means to be an associate partner in every general context, but associate partners generally lack some form of privilege or right reserved for a general partner.
The major advantages of having an associate business partner are that the partner can provide you with the capital necessary to jump-start your business. A partner can help bring additional business in through his connections and can share in any potential liability associated with your business. Even if you do not have a partner, you can limit the liability associated with your business by forming your business as a limited liability company, but having a partner may help you avoid any liability that is outside of the protection provided by limited liability company formation.
Important among the other advantages of having a business partner is that he can help to keep you personally accountable for tasks you've promised to complete. A partner can help brainstorm when fresh ideas are needed; he can provide encouragement and reinforce your ideas, or he can provide you with a different viewpoint.
Before taking on an associate partner you will need to carefully consider what the individual can do to help support your business. Taking on a partner may require you to sacrifice some of the power you have in the operations of your business or some of the equity you enjoy as the proprietor of that business. Additionally, adding an associate partner to your business can make entity formation and taxes much more difficult. Be sure to consult with a professional.
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