Forming a business partnership can be profitable for everyone but you want to consider a few factors
Deciding to enter into a business venture with a business in Hong Kong is exciting.
You have access to their products, services, and also their customers
It can be a profitable experience for everyone, as long as you do your homework.
Have you done your homework with regards to conducting a background check?
It means performing a Hong Kong company check.
Get to Know the Company’s Values
Part of a Hong Kong KYC is ensuring the company shares the same values.
KYC is the acronym for ‘Know your company’. It also stands for ‘know your customer’.
Just like knowing your customer can increase sales, it’s also an advantage to be familiar with the company you are considering partnering with.
A partnership always works best when your companies have similar values.
Whether it’s a shared commitment to the environment or ensuring employees’ well-being, you want to have similar long and short-term goals.
It will help the partnership move along more smoothly and reduce any friction.
You also want to ensure there are open lines of communication.
Decide on the Type of Partnership
Before you settle on a general or limited partnership, perform a Hong Kong company check.
It’s similar to the background check you perform as part of the hiring process.
A Hong Kong KYC can also make it easier to decide on the type of partnership.
A general partnership is the easiest. It requires very little paperwork and filing.
However, liability protection is limited. Depending on the goods or services being provided, liability protection may be a requirement. It can also be good business sense.
You can decide on a limited partnership. The downside is only one business has unlimited liability. Liability is limited for the other business partner. It can be viewed as an unfair agreement.
Another option is to enter into a limited partnership where both businesses have the same financial obligations. It does require more paperwork than a general partnership, but it also offers financial protection to both businesses.
Eventually the Partnership Will End
Even the most successful business partnerships come to an eventual end.
It’s a good idea to have a dissolution process in place at the start of the partnership.
Some issues to cover include how will the leaving partner be compensated for resources, time, and involvement.
If the partnership turns into a business, how will you sell it and divide the profits?
Having a set plan in place will help prevent any issues that may arise at a later date.
Talk to an Attorney
Your companies may agree about every aspect of the partnership, but it’s always recommended to consult with an attorney.
A business attorney is also familiar with the necessary documentation and can handle the filings with the appropriate agencies.
Using an attorney is an added expense but it is worth having the legal protection.
An attorney will work to protect everyone’s interest so you can concentrate on making the partnership a success.