Making choices remains the cornerstone of all business management. The first of them will appear as soon as your structure is built: should you join the army, or is it better to be alone? Even if this question arose later, it is important to have a little thought beforehand. Point on the ins and outs of this kind of approach.
Why mate?
The fact of connecting must come from the desire to pursue a common goal with other people, whether physical or moral. This is the principle of “intuitu personality” which means “according to the individual”. This collaboration should be the basis of the company of the future, especially when it is at the time of creation. In this case, different stakeholders usually develop the business plan together.
Joining together often means sharing decisions and outcomes, whether positive or negative. Association allows first of all to have a colleague with whom you will share sometimes difficult moments and sometimes happiness. This is equivalent to splitting the stress related to responsibility for your actions because you are now many.
This may allow you to keep additional money because your partner may also have his or her share in the capital, but the association allows you to multiply the work force, to benefit from any skills you don’t have. Or even not have an attitude. In addition to yourself, sometimes more objectively, look at some issues or on business.
With whom are you a partner?
Depending on the status of your company, you may partner with a natural person and/or a legal person. That is, a person and/or any other structure.
Some advise against partnering with a family member such as a close relative, even though family businesses are often more sustainable. It may still seem wise to prevent stress in your personal relationships from affecting your work, or vice versa.
The main criterion to take into account the choice of your partner is its complementarity with you and your skills. For example, it is often recommended to add a business profile to a technician. On the other hand, to ensure your “compatibility” it’s wise to partner with someone you’ve worked with before.
In the case of legal entities, synergy between related activities should be sought. Researching your prospective partner’s latest tax forms will inform you to some extent about his “health” and his management.
What kind of contribution?
Participation in a company is done in exchange for contribution. This can take various forms:
- cash contribution. This is the most classic case in which the individual contributes to the society by funding it. It can sometimes be partially released, i.e. made available to the structure later.
- contribution in kind. This includes granting the company tangible or intangible goods, such as patents. These elements should be financially assessed. Therefore it is generally mandatory, and always strongly recommended, to request a contribution auditor. The intervention of the latter generates a fixed cost.
- contribution to the industry. It is up to a participant to offer his/her technical skills for the operation of the structure. This device is more complicated to install than the previous one. He cannot participate in the growth of the share capital.
What precautions should be taken while joining?
Partnerships can be stimulating and rewarding. However, some precautions must be taken so that this approach remains an asset to the structure.
The first of these pertains to the distribution of shares. Any arrangement which would confer 50% of the decision-making power to one or more partners together should be avoided. In the event of a disagreement with the holder(s) of 50%, your company will face a blocking position which may condemn it. It is therefore appropriate that this percentage be greater or less than half of the shares, or even a minority partner which would allow you to make a decision.
In addition, make sure you seek professional advice so that you can be informed of the many effects that union creates in administrative terms. Thus the organization of the social system can be modified. Furthermore, the manager’s information obligations to the partners tend to be much greater than in the case of a single-member company or company.
Lastly, in order to work in complete peace and transparency, it is advisable to have honest exchanges while drafting the statutes. Instead of avoiding delicate topics, it is important to approach them. You also have the option of setting them out in writing in the partnership agreement. Then you will grow into complete peace.