what is a partnership

What is a Partnership?

Learn about a Partner with Jennifer Lopez
YouTube video
Wedding Planner 2001

The scene that you saw shows Mary Fiore (played by Jennifer Lopez) asking her boss to make her a partner at the firm. Mary is an ambitious and organized wedding planner in this company and brings in 5 times the revenue of every employee combined in the company.

She requests her boss to promote her to the partner level to keep the business running.

In this blog, Learning Perspectives will explore the meaning of Partnership.

What is a Partnership?

When two or more people decide to join hands together to run a business, it is called a business partnership.

Two heads (or more) are better than one, your business is easy to establish and start-up costs are low, more capital is available for the business, you’ll have greater borrowing capacity, and high-caliber employees can be made partners. There is an opportunity for income splitting, an advantage of particular importance due to resultant tax savings.

Rights of a Partner:
  • All the Partners of the company have the right to participate in the management of the company.
  • Partners have the right to be consulted in the running of the business.
  • Partners also have the right to allow or not allow admission of a new partner.
  • If a partner has advanced a loan to the firm, he has the right to receive interest on it, in case the rate of interest isn’t agreed upon, then interest is paid @ 6% according to the partnership act, 1932.
YouTube video
Understand Business Partnership with a Video

Each partner shares directly in the organization’s profits and shares control of the business operations. Recently, there was a partnership agreement between Google and Twitter. Two companies generally come together because a strategic benefit can be seen.

Later in the scene, the boss agrees to promote Mary if she gets the contract for the upcoming wedding. If Mary gets promoted she too will have a stake in the company.

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