When a sub-contractor passes the Utah state licensing exam they need to create a business and complete the necessary paperwork. While many contractors become sole proprietors or incorporate, some decide to become a partner with another contractor. If you are contemplating this form of business, there are some things you need to consider. With a Partnership all are responsible When two or more people form a partnership, everyone is equally responsible. This means that if the actions of one partner causes a lawsuit or the company is fined, all of the partners need to deal with the situation. If one partner leaves the other partners are liable to cover costs, even if they were incurred by the partner before they left. This means you need to know who you are going into a partnership with and make sure that they won’t do anything that will negatively impact the business. This isn’t always an easy thing to do, and many businesses end because of the poor practice of one or more partners Friendships and Partnerships don’t mix If you know a sub-contractor and have worked with him on multiple projects you may become friends. You may sit together after work and dream of the day when you are the general contractor and can do things your way. You may even discuss the possibility of becoming partners after the two of you have your licenses. This may not be the best idea. Friendship and business don’t always mix. There are times when tough decisions have to be made and the fact that your friendship may suffer can’t affect an import business choice. The fact you are friends may encourage your partner to do things they wouldn’t consider in a traditional business situation. When friends become business partners many friendships, and businesses, end up in tatters. While it is important to have a positive working relationship with those you become partners with, avoid going into business with those you consider your friends. This way you can keep business matters at the professional level, where they belong. If you make the decision to go into a partnership with one or more people, you need to make sure there is a formal business contract that clearly outlines the responsibilities of each partner. You may even want to consider creating a limited liability partnership, to protect your personal assets. Forming a business is an important decision, and a general contractor may not want to go into business alone. However make sure you protect yourself and your personal assets if you decide to create a partnership. Make sure everything is in writing, and keep all relationships within the company professional. This will help make your partnership a financial success.