THE LEGAL STUFF
has helped hundreds of business
owners put together (and dismantle)
their partnerships. Here are her
golden rules for keeping your
business relationship happy, healthy
and fair.
agreement. This should set the terms
of the partnership arrangement,
including entry and exit strategies.
govern your business arrangement.
For example: NSW partnerships are
governed by the Partnership Act 1892;
other states and territories have
similar legislation. Under the Act,
partners are each liable for all the
debts and obligations of the
partnership while they are partners.
a proprietary company. The biggest
difference between this and a
partnership is that all assets and
liabilities are held by the company and
not the individual shareholders.
get separate legal and accounting
advice.
fi nancial dealings and make sure you
are involved in all major decisions.
is a bit like falling in love, then turn-
ing the afterglow into a beautiful
marriage. First comes the thrill of a
new idea, then the mutual exhilara-
through hard work and fi nally, the quiet pleasure
of sustained success as Anna Gibson discovers.
goals, trust and hard work. The pressures can be
immense: money worries, steep learning curves,
equal emotional and fi nancial investment. Odd
then, to discover that so many people
base a business partnership on the
equivalent of a one-night stand: a
great idea, confi ded over a few drinks
turns into something bigger than Ben
Hur (at least for the parties involved).
students in Stanford University back in
the 70s. They shared some great ideas,
made a gazillion dollars and still share
an offi ce. Many times however, it fails.
According to the Australian Bureau of Statistics,
about 20 percent of all small businesses, includ-
ing a large number of partnerships, will dissolve
within the fi rst two years, and 65 percent with-
in 15 years. Why? Any number of reasons: Bad
decision making, bad luck, a personality clash, a
mismatch of expectations, the stress of owning,
fi nancing and running a company.
values, trust and honesty, and a matched capac-
ity for hard work.
absolutely critical," says Kate McCallum, who co-
founded Multiforte Financial Services with Terry
Downing and Tony Clark in 2006. "With a part-
nership, you have to trust each other. You have
to feel comfortable dealing with divergent views
or uncomfortable issues so take your time to
clarify your individual and collective objectives."
for a fl at-fee fi nancial advice business. She had
ample opportunity to assess how they worked to-
gether prior to establishing the business, but they
also clarifi ed their new roles and responsibilities
through a partnership agreement. They devel-
oped a business plan that outlined core strategies,
objectives, activities and fi nancials, and refresh it
during regular formal partner meetings.
greater capability across a range of areas that I
don't think I really ever felt that confi dent with
before," McCallum says. But she also continually
establishes processes to ensure they work collabo-
ratively wherever possible. "Any one person fl ying
solo in a partnership just doesn't work."
close relationship that underpins the international
success of their six-year-old clothing and accesso-
ries brand Ginger & Smart. In their business, the
workload is divided along creative and administra-
tive lines, with Genevieve overseeing design and
manufacturing, and Alexandra the management
and fi nance end of the business.
lies in the mix, so compassion plays a part in the
survival of their partnership. "We try to be forgiv-
ing of each other, and trust each other to look after
our various areas within the business," Alexandra
says. They also schedule regular meetings with key
staff to workshop any problems that might come
up. "This ensures we both know what is happen-
ing across the business and keeps communication
lines open," Genevieve says. "And we manage to
take moments out of the business, over a cup of
tea to just be sisters."
pressure off and allows us time to consider and
make our minds up," Alexandra says. "And we both
know how to say sorry."