Who is it for?
General partnership: collaboration based on trust
If you want to start a business with one or more partners, sharing responsibility for both operations and profits, then a general partnership (VOF) is your company form of choice. The general partnership is a flexible company form that works well for partners who want to run a business together and share the corresponding risks.
What is a general partnership?
A general partnership is a partnership between two or more entrepreneurs who establish a business together. The partners in a general partnership have unlimited and personal liability for the debts of the business. In other words, a general partnership is a legal entity but the partners remain personally liable for the obligations of the business.
No minimum capital is required to establish a general partnership and the structure is straightforward. All it takes to establish a general partnership is a basic agreement between partners, although it is strongly recommended to anchor clear arrangements in a partnership agreement.
Why opt for a general partnership?
A general partnership offers many advantages for partners who want to run a business together without complex administrative obligations. It is ideal for small to medium-sized businesses looking to share risks and generate profit together.
Benefits of a general partnership:
- Simple set-up, with no notarial deed or minimum capital
- Flexible division of tasks and responsibilities
- The opportunity to collaborate with a partner based on mutual trust
- Joint liability, which spreads the risk
- Ideal for small businesses and freelancers looking to work together
Who benefits from a general partnership?
A general partnership is perfect for:
- Two or more entrepreneurs who want to start a business together
- Partners looking to run a business based on mutual trust
- Entrepreneurs who do not wish to contribute considerable capital but are prepared to share risks
- Small to medium-sized enterprises looking to get started quickly
Clear agreements for successful collaboration
Although a general partnership is easy to set up, it is important to make clear arrangements with your partners regarding such matters as profit distribution, responsibilities and exit strategies. Our PIA accountants and advisory experts will help you draw up an agreement that protects your collaboration while ensuring everything is well-organised.
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