Starting a business: should you form a partnership?

Would you like to develop a business project? Alone or with others?

It's worth noting that both solutions are available to you. In fact, when you set up a business, you can choose a legal form based on the number of people who will join forces to develop the project (the partners).

Setting up a business alone or with others? We'll help you decide in this article!

What are the legal statuses for partnerships?

To begin with, it's important to listthe legal forms that can be used to form a partnership.

To develop a business with several associates, it is imperative to set up a multi-person company.

Several options are available:

• Société Anonyme or SA
• General partnership or SNC
• Société par Actions Simplifiée or SAS
• Limited Liability Company or SARL
• Or the Société Civile Professionnelle or SCP

For the vast majority of multi-stakeholder projects, SAS and SARL are the most popular and appropriate legal forms.

Why it makes sense to join forces

Secondly, we need to ask ourselves why it makes sense to join forces.

Joining forces to develop an entrepreneurial project has a number of advantages.

These are :

• The simple fact of not finding yourself alone at the helm of the ship, undergoing the pressures present at the launch of a new venture. So it's always good to be able to share doubts, worries and other demotivations with other project partners who are going through the same thing. This can help to put things into perspective, and provide moral support.
• Multiple skills. In fact, having several associates often enables you to benefit from a wide range of complementary skills. Such an effervescence of skills can accelerate the company's development.
• What's more, having a partner means that responsibilities can be shared. In this way, the objectives can be shared, accelerating the development of the project.
• Finally, developing a joint venture is also an opportunity to share investments. This makes it possible for two entrepreneurs to work together on a project while limiting their investments, and thus securing their personal assets at the same time, as most companies operate on the principle of liability limited to the amount of their contributions.

Joining forces with one or more people to build a business project has a number of advantages that need to be taken into account

Company: drawing up a partnership agreement

Finally, we need to look at how to draw up a partnership agreement.

Once you've decided which entrepreneurs you want to partner with, all that's left to do is write it all down on paper and formalize the association. To do this, it is necessary to draw up and sign a contract known as the "pacte d'associés" or "pacte d'actionnaires". The aim of this contract is to organize relations between the company's various partners as effectively as possible. It sets out in writing all the rules to be respected by the various partners.

It can be freely drafted, and the clauses it contains can be very different to suit each individual's situation.

A contract of this kind regulates governance and the various relationships within the company, particularly between managers and associates.

This document is usually drawn up when the company is created.

It can be relatively simple to set up, especially when the number of founding partners is small. However, if new partners are added as the adventure unfolds, such a contract needs to be renegotiated, and can quickly become increasingly complex.

For structures with many partners, it is preferable to use a specialist to negotiate the partnership agreement.

In conclusion, it can be advantageous to form a partnership. Even so, it's vital to work with the right person, and to follow the various administrative procedures scrupulously.