Disadvantages of a Joint Business Venture

Last time we showed you the advantages of a joint business venture. If you feel that it may just be the right kind of business structure for you, you may first want to take a closer look at its disadvantages.

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Sure you have the idea and business know-how. You know everything from where to get wholesale sunglasses to the marketing side of things. But before you take a plunge and make a move to find someone who can take care of the funding, here are the disadvantages of a joint business venture:

The type of structure does not provide liability protection. A partner is only responsible for at least his share of the company’s entire obligation. So if the company’s assets don’t cover the debts, worst case is that every partner could lose his personal assets until the debts are covered.

A joint venture has a limited life. There is only a limited period as to the partnership’s existence. This is indicated in the bylaws of partnership. Depending on the terms agreed upon by the partners, death or withdrawal can result to automatic termination. Still, depending on the matters agreed upon, there are other things that can end a partnership.

Disputes are imminent. Even though you have a common goal, there will always be disputes. Remember

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that the partnership involves different personalities and this is something you have to live by. There may be partners that will become difficult to deal with as you go deeper into the venture. There is money involved so there is a lot to expect, both favorable and the opposite. At some point, heads will clash so be sure you have this covered.

If you are still looking at the idea of engaging in a joint business venture, the articles hopefully have helped. For more business tips, kindly keep to this site.