Canadian Small Business Women

Connection, Synergy, Community

How should you set up your business? Part 2: What is “the Partnership”

In Part 1 of this series, I briefly discussed the three ways that a business can be structured (sole proprietorship, partnership or corporation). I then took a closer look at the sole proprietorship in greater detail and set out some of its strengths and weaknesses.

In this second part of this series, I am going to further explore “the partnership”. I will discuss what constitutes a partnership, as well as set out some of the pros and cons of a partnership that you may want to consider when deciding whether a partnership is the right structure for your business.

A partnership is constituted when two or more individuals carry on business together with a view to profit. There are three types of partnerships currently recognized in Ontario, those being:

  • General Partnerships (GP);
  • Limited Partnerships (LP); and
  • Limited Liability Partnerships (LLP).

What is the difference between these three types of partnerships?

In a general partnership, each partner’s liability for the obligations of the partnership is unlimited, whereas in a limited partnership that liability may be limited to the amount that the partner has contributed to the business. A limited liability partnership is a cross between a general partnership and a limited partnership; each partner is only liable for their own negligence.

What are the “pros” of a partnership?

  • Initial start-up costs are low.
  • Fairly simple way to set up your business with few legal formalities.
  • You can share in the responsibility of running the partnership business while maintaining limited liability in limited partnerships and limited liability partnerships.
  • The business’ capital losses can be used to offset the business’ capital gains (please contact your accountant for further information).

What are the “cons” of a partnership?

  • Your business is not its own legal entity. Thus, the business and personal assets of a partner may be seized to satisfy a liability of the partnership. For example, if you own real property i.e. a house, and your business has incurred debt, your house can be seized to fulfill that business debt obligation.
  • There is a risk of conflict amongst the partners regarding the management of the business itself.

Should you decide that a partnership is the right structure for your business, what are some other things you might want to consider?

  1. What terms should you include is your Partnership Agreement?
  2. How should you structure the partnership itself?

Stay tuned for the third and final part of this series where I will explore “the corporation” in further detail.

Disclaimer: A solicitor-client relationship is not established by viewing this article and will not be established until confirmed by the solicitor and client in writing. This article is not legal advice but legal information only, and cannot be relied upon for its completeness. If you have specific questions contact a lawyer in your jurisdiction. 

Jennifer Wilowski is a lawyer licenced to practice law in the province of Ontario. She is a Partner and co-founder at Anton & Wilowski LLP, a general practice boutique law firm in Mississauga, Ontario. Her main areas of practice include Corporate Law, Real Estate Law, Wills & Estates Law, Civil Litigation and Cannabis Law.

Connect with Jennifer:

Website: https://www.antonwilowski.ca/

LinkedIn: https://www.linkedin.com/in/jennifer-wilowski-183817181/

Grant Misconceptions

Aviary Photo_130605261112039905

Are you a business looking to apply for grants and a bit confused about the process? Well, we’re here to help you demystify some general misconceptions about grant funding and applications.

Misconception #1: Anyone can apply for a grant

The majority of grantmakers narrow the pool of grant applicants to registered charitable organizations and nonprofits. Incorporated businesses and startups are usually left out of the grant equation because, unlike nonprofits, they have the ability to sell a product or service for a profit. That’s why it’s important to be 100% sure your organization is eligible for funding before starting the grant-writing process.

This is not to say that there is no funding out there for small businesses and startups. It is just unlikely it will be in the form of grants, and rather in the form of tax incentives, hiring credits, and when possible, venture capital funding.

Misconception #2: Grant applications consist only of ‘writing’ and ‘submitting’

Grantwriting is based less on your style of writing and more on your capacity to plan a detailed project successfully. Forget flowery language, and focus on the content.

For first-time grant applicants, it is important to research grantmakers’ mandates, as well as their previously funded initiatives. Grantmakers want to make sure your organization is accountable for the funds they distribute to you.

Seeing as they don’t know you personally (yet), the onus is on you to make your case, and back it up with targeted research, data, and information. Take time to prepare grant applications. Make sure you are able to thoroughly analyze your project’s strengths and provide tangible solutions to mitigate any weaknesses.

Misconception #3: If your project is good, you’ll receive funding

This is by far the biggest misconception of all. In fact, there are a lot of great projects out there, created by trustworthy organizations, that will never receive funding.

Grantmakers tend to award funds based on a project’s expected impact in the community. Because grantmakers tend to receive a lot of applications during any given grant cycle, it’s their responsibility to find the ‘best’ projects within very large pools of applicants. They do this by reviewing applicants’:

  • Existing partnerships with community organizations and stakeholders
  • Social media networks and reach
  • Past organizational successes

If you are a new organization, it is likely you won’t have this information yet. To make it easier for your project to receive grant funding consider collaborating directly with a partner organization to build a track record for your project, as well as expand support for it in the community.

Misconception #4: Receiving grant money is easy and quick

The task of the grant reviewing committee is to thoroughly assess hundreds, if not thousands of applications per grant. Of course, this takes a lot of time and patience. That’s why grant funding decisions often take anywhere between 3-8 months, depending on the size of the grant (the bigger the dollar amount, the longer you are likely to wait).

So, if you are counting on a particular grant to fund your latest project, make sure you have alternative funding options at your disposal just in case grant funding is delayed, or doesn’t come through.

Some Final Questions    

Want to know how to avoid unnecessary pain when applying for grants? Prepare answers to the following questions before starting the application process:

  • Which community members and stakeholders will benefit the most from your project?
  • How will you involve participants during the planning and execution phases?
  • How will you measure or evaluate the impact of your project?
  • Do you have a workplan outlining all project steps, timeline, and resources?
  • What experience and/or qualifications does your organization have to carry out this project?
  • If activities continue beyond the term of the grant, how will they be sustained?

Written by Marisol and Silvia Fornoni, Founders of JDC.

JDC supports socially conscious organizations with finding sustainable ways to tell their stories using visual design, engaging content and non-traditional media. We help you with anything from organizing fundraising campaigns to web design and social media management.

http://www.joint-development.com

Facebook, Twitter, Instagram