The Ideal Partnership
An ideal partnership is a name given to a successful business. A partnership will be successful when there is proper understanding among partners. All of them work honestly and there is reliance on each other. Though it is a difficult proposition but it becomes an ideal to be achieved by the partners.
Mutual trust and good faith: The partners must have trust in each other. They should work honestly for the business and undertake things in good faith. A long acquaintance among partners is necessary for developing mutual faith and trust. The number of partners should be less so that harmonious relations are created among them.
Common Approach: The partners should have common approach and must act in co-ordination. Every one of them should have common interest in mind and work for the welfare of the firm. A spirit of co-operation and service should be the aim of the partners.
Equitable Adjustment of Rights: All partners may not have equal share in profits and management but the right of each one of them should be equitable. No one should feel that he is deprived of his just and due share.
Written Agreement: The agreement among partners should be in writing and signed by all of them to avoid any type of misunderstanding later on. The agreement should be comprehensive and precise and clearly state mutual rights and obligations of partners.
Competent Management: The management of the firm should be in competent hands. There should be consultations among partners but final decision should left to those who have proper experience and ability.
Long Duration: A small or medium scale business needs long period to be successful. An ideal partnership should be set up for fairly a long period so that there is a stability and continuity in operations. A longer period also helps in proper understanding among partners.
Adequate Capital: There should be sufficient funds to meet both long term and short-term needs of the business. The partners should preferably contribute funds for long term needs while short-term needs may be met from banks and other sources. There should be a plugging back of profits and limits be placed on dealings by partners.
Registration: An ideal firm should not suffer from any disadvantage. An unregistered firm cannot enforce its rights against outsiders in the court of law. The firm should be properly registered even through it is not compulsory under Partnership Act.