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By Marci Glover


Businesses are formed for a number of reasons. In most cases, ventures are formed with an aim of filling in a gap that exists in any markets. Market niches are as a result of some of customers needs being unsatisfied. This means that those who can take care of these needs special to the customers. A commercial venture may be established by one or more partners. Existence of partnership means that the costs and risks are shared proportionately.

Partnerships are special corporate agreements between groups of investors. Kingdom first business associates are a classical example of partnership. The partners came together trying out their hands in different types of businesses. Through the special partnership, they are able to specialize. One could be an expert in finance and accounting matters while the other partner may have special skills in administration. Through the delegation and sharing of duties, costs are reduced. With specialty businesses are run very well.

Business associates achieve general increase in the level of expertise pooling by joining with others. Specialization is one of the best ways of creation of synergies and ensuring convergence. Company directors take the role of accounting, finance or legal counsels within an organization. Strategic alliances can also be created by joining with other organization especially when undertaking a special project. The formation of joint ventures and strategic alliances lays foundation for running concurrent operations.

Financing of partnerships depends on the agreements between the partners. The active partners are actively involved in the running of different operations within the premise commercial or outside the premises. Financing is commonly done through the pooling of resources by the members of a partnership. Each may be asked to contribute a certain amount of money. The returns from the different operations are shared proportional to the ratio of contribution. Expenses may be ignored or alternatively be shared according to the ration of contribution too.

Partners venture into an area of specialization. Plant specialists, designers, electrical and mechanical engineers tend to venture into manufacturing industries where machines have to be assembled. They also venture into processing industries since they have what it takes to undertake such operations. The accountants, lawyers and financial specialists tend to venture into the service industry since this is where their skills are needed.

There partnership regulations in most parts of the world. The local partnership framework is adopted from the international framework of running commercial ventures. The location of the international regulations ensures that the laws are suited for the local businesses. Any modifications are done once the local implementation process has been completed.

Local partners may receive some incentives from the government as a way of promoting businesses. Some may be exempt from taxation for the first few years of operations. This gives them time to adapt to local environment. Some of their business operations may also be completely exempt from taxation.

Public and private partnerships are also common. This is common in cases where the development of some industrial aspects is very technical and calls for specialty. The government issues a tender to a private investor to develop and run a project for some time. The operations are then controlled by the private investors until all the costs are recovered.




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