Idaho law in some cases considers two or more people conducting business to be a partnership. This holds true even if you didn’t formally register the business. Registering as an LLC or corporation, however, would classify your company differently. It’s important to formally set up your business as a partnership or other entity to protect yourself from disputes. Decision-making is a key issue to consider because you’ll one day find a matter that you disagree on.
The method of making decisions that most people may think of for preventing partnership disputes is majority vote. Professional partnerships allow each person the opportunity to express their opinion to the others before holding a vote. They may share concerns, offer alternative solutions and ask questions. If your business only has two partners, including you, you could include upper management or outside business advisers in the democratic decision-making process.
Similar to the majority vote method, consensus allows time for each partner to ask questions, voice concerns and present new ideas for resolving an issue. The difference is, you reach a collective agreement rather than going through a formal vote. Some people may not entirely agree with a decision, but they give their consent to it.
If your business has so many partners that the previous two strategies aren’t practical, you may want to use delegation. With this method, you would choose a set number of partners, committees, managers or long-term employees to handle decisions.
You could make your decision makers specific to types of business issues, such as finance and marketing. This allows you to select decision makers who are knowledgeable about what they’re deliberating on.
When you set up a partnership, you must clearly outline how the business will make decisions. This prevents conflict, saves time and fuels the success of the organization.