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Partnership: “A relationship of two or more entities conducting business for mutual benefit.”

Partnerships are frequently used in family businesses.
An advantage of being in a partnership is having someone else to rely on to help you with making decisions while relieving some of the financial risk and burden that come along with being a sole proprietor. Decisions made easier in a partnership include every day management concerns and visionary based concerns that you and your partner see for your company. It also allows each partner to kick ideas around and off of the other. It relieves some of the pressure of running a business on your own and having sole responsibility of the company’s welfare. Being a sole owner gives you more liability and thus more added stress. Being in a partnership gives the company more diversified expertise and outlook and allows each partner to make up or compensate for each other’s deficiencies. It also allows each partner a perspective different from their own. Each partner brings different strengths and therefore you can feed off each and ask what you think about this or what do you think about that. Disadvantages include that in a partnership you do not have sole control of decisions even if one person has more stock then the other you must get their approval before making a decision. You must talk to the partner in order to do what you think is the right move. In sole ownerships you make decisions more on your own where as a partnership allow you to be on somewhat of a team and share ideas with another person. But family partnerships are different then non-family partnerships. A disadvantage that often arises within a family partnership is that if there are tensions between family partners it can cause ripple effects within the business itself and become a issue that needs outside help and resources to resolve. There are also different types of partnerships in family businesses such as: sibling partnerships, co-CEO partnerships, as well as family and non- family partnerships, all bringing to the table with them their own unique lists of advantages and disadvantages.

Poza, Ernesto J. Family Business. 3rd ed. Mason, OH: South-Western Cengage Learning, USA.