If properly conducted, there is much to commend the management of a business through partners.

Never go into a partnership with a man who puts in his experience against your capital, unless you know him like a brother.

"It lasted about a year," said a man who had done this. "Now the fellow, who has cleared out, has the capital and I have the experience."

A partnership is an agreement between two or more persons to associate for the purpose of carrying on a certain form of business.

Each member of a copartnership must contribute a stated contribution to the establishment of the enterprise, but each need not give the same amount.

Neither is it necessary that the contributions of each to the firm shall be of the same character.

One may contribute a building, another machinery, or material, and still another money.

The shares in the profits are based on the cash values of the different contributions.

The work of the different parties may be estimated as contributions, but in such cases it is better to pay the worker a fixed compensation, and charge this to the expense account.

PREPARE AND SIGN

Never go into a partnership based on a verbal agreement, unless it be for the distribution of fish, game or nuts, when out with a friend for a holiday.

Have the copartnership articles carefully drawn up and signed before you put a cent into the undertaking. A document like this can be appealed to should disputes arise; and should a partner die, his heirs may find it of the greatest value.

The articles should contain:

1. The amount to be contributed by each. 2. The nature of the business. 3. The time which the partnership is to last.

If the time is not specified, a partner may withdraw whenever he pleases.

If the profits are to be equally divided, this should be stated and provided for.

SILENT PARTNERS

When a man invests money in a business in the management of which he takes no active part, he is said to be a "silent partner."

Such a partner has a share in the gains and he is responsible as the others for the firm's liabilities.

Again, a man may not give money or time to a firm, but is willing, for business reasons, that his name shall appear as if he were in the association. In this case the man is known as a "nominal partner."

Although this man is not entitled to a share in the profits and has no money invested, yet he can be held liable for the debts and other obligations. The reason for this is very plain.

LIABILITY

In all matters rightly belonging to the business of a firm, any member has the right to act, and his acts will be held binding in law.

It is usual for partners active in a business to have each his separate duties, but even if these duties be designated in the articles of agreement, the outside business world is not supposed to know anything about the relative duties of the members of a firm as decided among themselves, so it is decided that each is empowered to act for his partners.

Under the usual articles, it is stipulated that while a dual partnership lasts, neither of the members shall make a note, sign a bond, or enter on any outside obligation as an individual without having secured the written consent of his business associates.

Each partner in a firm is liable with the others for all the business indebtedness.

If a firm fails, and the assets are found not sufficient to satisfy the creditors, they can levy for satisfaction on the private property of one or all of the partners.

If a member of a firm should become so far indebted, as an individual, that he cannot comply with his obligations, the interest he holds in the firm may be disposed of and applied to the payment of his debts.

This does not mean that the creditors may take or seize on any particular thing which the firm holds jointly, but that the debtor's interest in the concern may be so disposed of. All this the law has provided for.

A new partner admitted into a firm cannot be held responsible for the debts of the old concern.

HOW TO DISSOLVE

Every partnership agreement must provide for and distinctly state the period for which it is to continue.

At the end of the period named, the partnership is dissolved by limitation.

If the partnership is to continue, a new agreement must be made and signed.

On proper application, a partnership may be dissolved by an order of the court.

If a member who has become objectionable to his partners should not agree to a dissolution of the firm, the partners may apply to a court of competent jurisdiction for a decree of dissolution.

No member of a firm can withdraw at his own option. The consent of the other partners is necessary, and before he is released he must provide for his share of the obligations.

Notice of dissolution should be published, and notices sent to agents and others interested.

The following is the customary form of notice:

The copartnership heretofore existing
between John Smith, Harry Roberts and
Thomas Allen, under the firm name of
Smith, Roberts & Co., is this day
dissolved by mutual consent.
John Smith.
Harry Roberts.
Thomas Allen.
June 30, 1910.

SPECIAL PARTNERSHIPS

Limited or special partners are not recognized in some states.

This is a method of association whereby a person joins a partnership, putting in a sum agreed on, and which he may stand to lose as an investment. He is entitled to a pro rata in the profits, but he cannot be held for the debts.

In some countries marriage is regarded as a civil contract or form of partnership, subject to dissolution by the courts.