The paper 'Corporate Governance Issues' is a perfect example of a Management Assignment. Thank you for asking for advice from this organization. After such a lengthy discussion we had with both of you, I highly recommend that you engage in a business partnership. I will give you a brief background on the forms of partnership that are applicable to you and later narrow down on the best fit. It is important to remember that you already have shared interests in running a business over a long period you have known each other.
Note that a partnership is formed by a number of people from two to a maximum of twenty. This is important for you to know that you already a number that is legally acceptable to begin a business partnership (Benet & Abbe 1964, p. 16). A general partnership will require the two of you to be equally responsible for the management of your business, each of you will have unlimited liabilities for all obligations that occur and debts. The second option for consideration by the two of you is the limited partnership.
This form exempts one partner from particular liabilities that would be incurred when the business is operational. The affected member will have limited liability. This means that the remaining partner is an automatic general partner. The general guidelines on this form of a partnership are that if you wish to expand in the future, the number of limited partners has no limit in the law (Poe1988, p. 21). One advantage that you will enjoy with this type of business investment is that since you are of two different professions that are John is a lawyer and Fred an accountant, and then you will pool the diverse knowledge, skills, and experience.
The risk involved is that you ought to be careful to avoid conflicts of personalities as this may cause disputes (Benet & Abbe1964, p. 33). This form of a business partnership is flexible in the sense that you are at liberty to change the structure to suit the circumstance. In addition to following the legal processes of registration, the partners will have to draw up a Partnership Agreement.
The agreement identifies important elements that include the authority, roles, and liabilities of each partner. It also stipulates how the business partners will share the profits that the business will gain. The process of registration will include searching for the business. It is, however, important to remember that if you decide to run the business in your two names that John and Fred, then you will be exempted from the process of searching the business name. I recommend that engaging in a general partnership would be better than the limited partnership.
In doing this, the Partnership Agreement will spell out its exclusive rights, obligations, and duties. It also underscores what is legally mandated for each partner. Gaps that may appear in the Partnership Deed are catered for in the general guidelines that government laws have stipulated that in most cases are used as foundations of developing specific agreements for partnerships that form. Your duties as partners in a general partnership will include running the business to the benefit of both partners (Poe1988, p. 51). The two professions are very important. John will apply his experience in law to deal with legal matters of the partnership that may include registration and legal aspects that the business may face in the future.
Fred, who is an expert in financial matters, will deal with money with matters very well. Each partner has an obligation to be faithful to the other. They are expected to demonstrate maximum fairness towards other partners in business throughout the business activities.
List of References
Benet, V & Abbe, G 1964, Stephen Vincent Benet on writing: A great writer's letters of advice, Greene Press, Brattleboro.
Jackins D 2004, Special needs trust administration manual: A guide for trustees, IUniverse.com, Lincoln.
Monks, G & Minow, N 2004, Corporate governance, Malden, Blackwell Pub, Mass.
Poe, W 1988, The McGraw-Hill handbook of business letters, McGraw-Hill, New York.
Rahim D 2005, The fiduciary an in-depth guide to fiduciary duties--from Studebaker to Enron, iUniverse, New York.