Partnership

A partnership is a business engaged in by two or more persons. It is also a common form of business in ornamental horticulture. It works best when the partners have interests and abilities that complement rather than duplicate each other. For example, a flower shop partnership might involve one partner with an interest in design and another who prefers sales and customer contact. A nursery could be owned by one partner who looks after promotion, sales, and administration, and another who oversees outdoor field production. Should the partners decide to add a greenhouse range for propagation, they might take in another partner to provide capital and/or take charge of the greenhouse operation.

In modern partnerships, all agreements between partners are in writing before the business begins. The terms of agreement should include the percentage of original capital to be provided by each partner, the responsibilities assigned to each partner, the business objectives of the partnership, and provision for the dissolution of the partnership in the event a partner dies or wishes to leave the business. While such a contract, prepared in advance, will not ensure that part­ners work together compatibly, it will help to expose potential areas of misunderstanding or disagreement before the pressures of the work arena complicate them.

In the classic partnership, the two partners contribute the same amounts of capital and divide the work equally. They each draw the same weekly salary, and at the end of the year they divide the profits equally. In such a situation, each partner is an agent of the business, empowered in the eyes of the law to act on behalf of the business, to contract with other firms, receive credit, and obligate the company. Both partners become liable for the actions of either partner.

There are variations on the classic partnership. In one, a single part­ner provides most or all of the capital, and the other(s) provide the tech­nical and administrative skills to operate the business. Another variation is the limited partnership where one or more partners perform some function, such as partial capitalization, but limit their claims on the profits or liabilities to a share agreed to in advance. Where liability is lim­ited for some of the partners, at least one partner must agree to be legally responsible for all the liabilities of the company. Limited partnerships usually restrict the right of the limited partner(s) to obligate the firm.