Partnerships

A partnership is an arrangement where entities and/or individuals agree to cooperate to advance their interests. In the most frequent instance, a partnership is formed between one or more businesses in which partners (owners) co-labor to achieve and share profits or losses.

Partnerships are also frequent regardless of and among sectors. Non-profit organizations, for example, may partner together to increase the likelihood of each achieving their mission. Governments may partner with other governments to achieve their mutual goals, as may religious and political organizations. In education, accrediting agencies increasingly evaluate schools by the level and quality of their partnerships with other schools and across sectors. Partnerships also occur at personal levels, such as when two or more individuals agree to domicile together. Partnerships between governments, interest-based organizations, schools, businesses, and individuals, or some combination thereof, have always been and remain commonplace.

Partnerships have widely varying results and can present partners with special challenges. Levels of give-and-take, areas of responsibility, lines of authority, and overarching goals of the partnership must all be negotiated. While partnerships stand to amplify mutual interests and success, some are considered ethically problematic, or at least debatable. When a politician, for example, partners with a corporation to advance the corporation’s interest in exchange for some benefit, a conflict of interest may make the partnership problematic from the standpoint of the public good. Developed countries often strongly regulate certain partnerships via anti-trust laws, so as to inhibit monopolistic practices and foster free market competition.

Among developed countries, business partnerships are often favored over corporations in taxation policy, since dividend taxes only occur on profits before they are distributed to the partners. However, depending on the partnership structure and the jurisdiction in which it operates, owners of a partnership may be exposed to greater personal liability than they would as shareholders of a corporation.