A partnership is a formal arrangement by two or more parties to manage and operate a business and share its profits. It is a way to increase the amount of revenue both companies can create. There is a contract that is signed by all parties.
11 Important Duties of Partners in a Partnership:
- To observe good faith means that they should trust each other, creating the most significant advantage for both parties. The information they share with each other has to be trusted and ensure that all the information is there.
- To Indemnify for Loss If there are losses within the partnership, the other side should help compensate for the party’s defeat.
- To Attend to his Duties Diligently All parties within the partnership is bound to attend diligently to their duties while conducting the business
- Not to Claim Remuneration If there is no direct agreement for remuneration, the part from both sides will not have to help each other with work
- To Indemnify for Willful Neglect, it means that they would have helped them with their intentional failures if it is not a fraud.
- To Share Losses All parties, have to pay for the losses equal to their percentages.
- To hold and Use the Property of the Firm, the firm’s use has to agree with which property would be occupied with each party.
- To Account for Private Profits are usually used in goodwill for its’ own property
- To account for the Profits of a Competing Business The profits that a partner makes will keep the profits.
- To Act within Authority