Partnership, like Sole Proprietorship, is a very popular form of business formation in Nigeria. It is a type of business organization in which two or more individuals agree to contribute money, skills, and other resources in turn they share profit and loss in accordance with terms of the partnership agreement. In absence of such agreement, a partnership is assumed to exit where the participants in an enterprise agree to share the associated risks and rewards.
when searching for a name for a partnership business, the partners have a lot of options to fall to. For instance, Adebayo, Bankole and Callixtus want to run a food business together, they could use the following options:
- They could use the first letters of their names, i.e. A.B.C FOODS ENTERPRISE
- They could use their first names, i.e. Adebayo, Bankole & Callixtus Food Enterprise.
- They could also just get a fictitious name like Divine Foods Enterprise.
Whatever option they choose to go for, it doesn’t take away the ownership of the business from them.
It is important to note that not every partner is necessarily involved in the management and day-to-day operations of the venture. Some partners are only involved in providing the finances needed in starting up the business or funding it to the point where the business can provide funds to run itself and make profit. In some other cases, all partners actively get involved in the running and day-to-day management of the business.
Although a partnership can be formed orally, in writing or even by conduct, it is advisable to have a Partnership Deed/Agreement. The agreement addresses the purpose of the business, the law governing the partners and responsibility of each partner. The sharing of profit and liabilities for each partner is also spelt out in the Partnership Agreement as is equal to the input of each partner. It’s a good idea to consult an attorney experienced with small businesses for help in drafting the agreement.