[Question] Starting a partnership

[trentpark8800]

Me and three friends want to start an investment club using a partnership agreement.
We're all young professionals and are completely new to entrepreneurship and the business world in general.

With that in mind my question(s) are:
- Is a partnership essentially a tacit agreement i.e. we don't need an attorney to create a contract for us?
- How do we register our partnership at SARS?
- What documents do we need to fill out?
- Do we need a joined bank account (cheque account) before getting a tax number or is it visa versa?
- Once we have a tax number and bank account can we open up a brokerage account under the partnership?

Any help and advice is welcome, thanks in advance!

[Andromeda]

Hi there

- Is a partnership essentially a tacit agreement i.e. we don't need an attorney to create a contract for us?

It can be, but at your peril. It's terms rather need to be explicitly stated in writing.

- How do we register our partnership at SARS?

A partnership is not taxed as an entity. The partners are taxed on their partnership (and other) income

You should rather consult an attorney or competent company secretary. Depending on what type of professionals you are and what the nature of your intended endeavor is, an incorporation or Personal Liability Company might be a better choice.

[Justloadit]

In the partnership agreement start with the following points, then add all the other points you all wish to agree upon.

It may sound negative, but once you can work out through these 3 points, then the rest is plain sailing. I have seen too many partnerships, myself included that have major problems when the partnership does well and then there is money in the kitty.

1. What each member is going to do for the partnership and the exact duties, and for this what is the expected remuneration, and when remuneration is paid - be very descriptive here. Make sure everyone is happy with the terms, especially if one partner is to be paid while the others support.
2. What occurs to the partnership if the duties as per 1 are not adhered too. What are the consequences/procedures/process/etc.
3. What is the procedure to dissolve the partnership, who gets what, and what are the terms.

All partners must have access to the bank account, a minimum of 2 partners required to do any payments, transfers. In the old days this was referred to as signatures on a cheque, however in today's electronic banking you require a business account, which has access and payment as individual members rights/access. This will reduce fraud or misuse of funds.

I suggest that you first start with a generic partnership agreement which can be downloaded from Google.
Read, add and remove clauses which match your requirements. Then adding the above points, go and see a lawyer, who will put all the clauses into an agreement. Make sure you understand each clause.

Once the first draft is drawn up, I would suggest getting a second opinion before accepting.