What Is a Business Partner?

What Is a Business Partner?

The very term business partner or partners indicate that more than one person is engaged in a commercial enterprise. Generally, a business partner is misunderstood to mean that the partner has invested capital in the business. But this is not always the case. A commercial enterprise may offer a partnership to an inventor or manufacturer. The partner shares in the profit by giving exclusive manufacturing or selling rights to the enterprise that offers him or her partnership.

Partners can be family members, and this is the case in a number of small and medium-sized firms. Family members are made partners for several reasons. Of course, the major reason is that the business continues to remain in the family even after the death of its initial owner or one of its owners. Secondly, the tax paid by the business is reduced when there is more than a single owner.

That’s why brothers and sisters, husbands and wives, and fathers and sons are the co-owners of a number of commercial enterprises. Companies ranging from shops to factories to multinationals are generally owned by a family. Even in large public enterprises the major stockholders are members of a single family. Certain partners are ‘sleeping partners’, which means that they invest in a firm and get a fixed income for their investment or share of the profits. They have no say in the running and managing of the business.

Today the business world is witnessing a radical change from traditional business partners who were mostly family or friends. The internet is largely responsible for heralding in this change. Nowadays business partners is referred to more as commercial enterprises joining together to expand their business objectives. A classic example of this type of business partner venture can be found when Dell agreed with Intel to only install their processors in their computers.

Nowadays, small business ventures seek partners to market their products. All partner agreements are time-based and legalized. As the internet has brought more competition among businesses, a number of business owners have signed up with international partners to expand their business.

Today a business partner can be a supplier, a customer, an intermediary, or a vendor. Resellers and agents are described as business partners. Complimentary vendors are those who depend on each other to sell their products, like a hardware manufacturer and a software supplier.

The term ‘business partner’ has taken on a new dimension as businesses have changed. Small and large companies especially those who complement each other prefer to become partners. Both retain their own individuality, and at the same time, profit from each other.

If there is a business that’s doing well and wants to expand its operations, it will easily be able to find international partners. Becoming partners can be tricky when two firms that are based in different countries decide to enter a partnership, as the first hurdle is to decide which country’s laws will govern the partnership. However, a number of business partners have profited by joining forces and forming a partnership.

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