{"id":28213,"date":"2024-07-14T23:56:00","date_gmt":"2024-07-14T15:56:00","guid":{"rendered":"https:\/\/www.granitefirm.com\/blog\/us\/?p=28213"},"modified":"2024-07-31T19:52:21","modified_gmt":"2024-07-31T11:52:21","slug":"discussion-on-partnership","status":"publish","type":"post","link":"https:\/\/www.granitefirm.com\/blog\/us\/2024\/07\/14\/discussion-on-partnership\/","title":{"rendered":"A brief discussion on partnership"},"content":{"rendered":"\n<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_82_2 counter-hierarchy ez-toc-counter ez-toc-custom ez-toc-container-direction\">\n<div class=\"ez-toc-title-container\">\n<p class=\"ez-toc-title\" style=\"cursor:inherit\">Table of Contents<\/p>\n<span class=\"ez-toc-title-toggle\"><a href=\"#\" class=\"ez-toc-pull-right ez-toc-btn ez-toc-btn-xs ez-toc-btn-default ez-toc-toggle\" aria-label=\"Toggle Table of Content\"><span class=\"ez-toc-js-icon-con\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #ffffff;color:#ffffff\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #ffffff;color:#ffffff\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/span><\/a><\/span><\/div>\n<nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/www.granitefirm.com\/blog\/us\/2024\/07\/14\/discussion-on-partnership\/#Introduction_to_partnership\" >Introduction to partnership<\/a><ul class='ez-toc-list-level-3' ><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/www.granitefirm.com\/blog\/us\/2024\/07\/14\/discussion-on-partnership\/#Most_venture_capital_firms_are_partnerships\" >Most venture capital firms are partnerships<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/www.granitefirm.com\/blog\/us\/2024\/07\/14\/discussion-on-partnership\/#What_else_industries\" >What else industries?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/www.granitefirm.com\/blog\/us\/2024\/07\/14\/discussion-on-partnership\/#Typical_cases\" >Typical cases<\/a><ul class='ez-toc-list-level-4' ><li class='ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/www.granitefirm.com\/blog\/us\/2024\/07\/14\/discussion-on-partnership\/#Buffett_Partnership_Ltd\" >Buffett Partnership, Ltd.<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/www.granitefirm.com\/blog\/us\/2024\/07\/14\/discussion-on-partnership\/#Accenture\" >Accenture<\/a><\/li><\/ul><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-7\" href=\"https:\/\/www.granitefirm.com\/blog\/us\/2024\/07\/14\/discussion-on-partnership\/#Partners_company_highlight\" >Partners company highlight<\/a><ul class='ez-toc-list-level-3' ><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-8\" href=\"https:\/\/www.granitefirm.com\/blog\/us\/2024\/07\/14\/discussion-on-partnership\/#Partners_profit_sharing\" >Partners&#8217; profit sharing<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-9\" href=\"https:\/\/www.granitefirm.com\/blog\/us\/2024\/07\/14\/discussion-on-partnership\/#Partnerships_vs_Limited_Companies\" >Partnerships vs. Limited Companies<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-10\" href=\"https:\/\/www.granitefirm.com\/blog\/us\/2024\/07\/14\/discussion-on-partnership\/#Key_points_of_partnership_agreement\" >Key points of partnership agreement<\/a><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-11\" href=\"https:\/\/www.granitefirm.com\/blog\/us\/2024\/07\/14\/discussion-on-partnership\/#Related_articles\" >Related articles<\/a><\/li><\/ul><\/nav><\/div>\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Introduction_to_partnership\"><\/span>Introduction to partnership<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Most_venture_capital_firms_are_partnerships\"><\/span>Most venture capital firms are partnerships<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>The company types of most venture capital firms are <a href=\"https:\/\/en.wikipedia.org\/wiki\/Partnership\" target=\"_blank\" rel=\"noreferrer noopener\">partnerships<\/a>, so it is necessary for us to briefly introduce the differences between partnerships and the commonly known limited companies.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"What_else_industries\"><\/span>What else industries?<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>In addition to venture capital firms, accounting firms, law firms, consulting firms, private equity funds, investment banks, and wealth asset managers; these types of large companies are usually partnerships\u2500\u2500unless they are companies To go public, it will be reorganized into a limited company.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Typical_cases\"><\/span>Typical cases<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<h4 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Buffett_Partnership_Ltd\"><\/span>Buffett Partnership, Ltd.<span class=\"ez-toc-section-end\"><\/span><\/h4>\n\n\n\n<p>The &#8220;Buffett Partnership, Ltd.&#8221; before Buffett turned Berkshire into a holding company was a well-known partnership. Regarding &#8220;Buffett Partnership&#8221;, please see my post for details: &#8220;<a href=\"https:\/\/www.granitefirm.com\/blog\/us\/2021\/07\/27\/warren-buffetts-ground-rules\/\">The Chronicle of Buffett Partners &#8220;Warren Buffett&#8217;s Ground Rules<\/a>&#8220;<\/p>\n\n\n\n<h4 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Accenture\"><\/span>Accenture <span class=\"ez-toc-section-end\"><\/span><\/h4>\n\n\n\n<p>For example, before Accenture (ticker: ACN), the world&#8217;s largest technology consulting company was listed on the stock market, the company&#8217;s structure had always been a partnership. In order to go public, the company was forced to reorganize to comply with listing regulations.<\/p>\n\n\n\n<p>Before going public, Accenture did not have a so-called CEO, a vice president, or a salesperson like other companies, and there were no market planning positions that everyone knows about and that are common in listed companies.<\/p>\n\n\n\n<p><strong>Note<\/strong>: Consulting company like Accenture use &#8220;firm&#8221;, not &#8220;company&#8221;, especially when they are private held.<\/p>\n\n\n\n<p>For Accenture, please see my post of <a href=\"https:\/\/www.granitefirm.com\/blog\/us\/2021\/05\/12\/what-kind-of-company-is-accenture-the-mckinsey-of-technology-industry\/\" target=\"_blank\" rel=\"noreferrer noopener\">&#8220;What kind of company is Accenture, the McKinsey of technology industry?<\/a>&#8220;<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Partners_company_highlight\"><\/span>Partners company highlight<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Partners_profit_sharing\"><\/span>Partners&#8217; profit sharing<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>General partners refer to investors who invest in venture capital companies. They will not participate in the daily management of venture capital companies; the opposite is general partners.<\/p>\n\n\n\n<p><strong>Note<\/strong>: Ordinary retail investors are not qualified to invest in venture capital companies at all, because the minimum entry threshold for capital is more than one million U.S. dollars.<\/p>\n\n\n\n<p>The general rule are below:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Investors must pay 2% of funds as annual management fees every year.<\/li>\n\n\n\n<li>The general partner can share 20% of the venture capital company&#8217;s profits, and the remaining 80% is distributed to the general partner.<\/li>\n<\/ul>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Partnerships_vs_Limited_Companies\"><\/span>Partnerships vs. Limited Companies<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>A partnership can distribute the profits generated by the company to its partners on the premise of avoiding double taxation; in comparison, most listed companies are limited companies. When listed companies distribute profits to shareholders, there will be Disadvantages of double taxation.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Key_points_of_partnership_agreement\"><\/span>Key points of partnership agreement<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>General partners will be required to devote themselves fully to the partnership and must also assume the legal obligations and responsibilities of the partnership. Therefore, the general partners and the roles of general partners in a partnership are usually defined separately by agreement. The main contents of the protocol specifications must include the following items:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>How company profits are distributed<\/li>\n\n\n\n<li>Rights and obligations<\/li>\n\n\n\n<li>Shareholding ratio and redemption period<\/li>\n\n\n\n<li>Company management<\/li>\n\n\n\n<li>Conflict of interest<\/li>\n\n\n\n<li>Areas of investment<\/li>\n<\/ul>\n\n\n\n<figure class=\"wp-block-image size-full\"><img loading=\"lazy\" decoding=\"async\" width=\"100\" height=\"100\" src=\"https:\/\/www.granitefirm.com\/blog\/us\/wp-content\/uploads\/sites\/2\/2024\/07\/partnerships-Custom.jpg\" alt=\"partnership\" class=\"wp-image-28215\"\/><figcaption class=\"wp-element-caption\">credit: Gemini<\/figcaption><\/figure>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Related_articles\"><\/span>Related articles<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<ul class=\"wp-block-list\">\n<li>&#8220;<a href=\"https:\/\/www.granitefirm.com\/blog\/us\/2024\/07\/14\/discussion-on-partnership\/\" target=\"_blank\" rel=\"noreferrer noopener\">A brief discussion on partnership<\/a>&#8220;<\/li>\n\n\n\n<li>&#8220;<a href=\"https:\/\/www.granitefirm.com\/blog\/us\/2024\/07\/26\/startup-issues-people-care\/\" target=\"_blank\" rel=\"noreferrer noopener\">Startup issues that most people care about<\/a>&#8220;<\/li>\n\n\n\n<li>&#8220;<a href=\"https:\/\/www.granitefirm.com\/blog\/us\/2024\/05\/29\/don-valentine-sequoia\/\" target=\"_blank\" rel=\"noreferrer noopener\">Don Valentine, founder of Sequoia Capital, father of Silicon Valley Venture Capital<\/a>&#8220;<\/li>\n\n\n\n<li>&#8220;<a href=\"https:\/\/www.granitefirm.com\/blog\/us\/2021\/07\/27\/warren-buffetts-ground-rules\/\">The Chronicle of Buffett Partners &#8220;Warren Buffett&#8217;s Ground Rules<\/a>&#8220;<\/li>\n\n\n\n<li><a href=\"https:\/\/www.granitefirm.com\/blog\/us\/2021\/05\/12\/what-kind-of-company-is-accenture-the-mckinsey-of-technology-industry\/\" target=\"_blank\" rel=\"noreferrer noopener\">&#8220;What kind of company is Accenture, the McKinsey of technology industry?<\/a>&#8220;<\/li>\n\n\n\n<li>&#8220;<a href=\"https:\/\/www.granitefirm.com\/blog\/us\/2023\/10\/24\/angel\/\" target=\"_blank\" rel=\"noreferrer noopener\">Angel is an excellent venture capital  book for ordinary people<\/a>&#8220;<\/li>\n\n\n\n<li>&#8220;<a href=\"https:\/\/www.granitefirm.com\/blog\/us\/2023\/06\/08\/essays-by-marc-anderson\/\" target=\"_blank\" rel=\"noreferrer noopener\">Two famous essays by Marc Anderson on software and artificial intelligence<\/a>&#8220;<\/li>\n\n\n\n<li>&#8220;<a href=\"https:\/\/www.granitefirm.com\/blog\/us\/2021\/06\/06\/zero-to-one\/\">Zero to One<\/a>&#8220;<\/li>\n\n\n\n<li>&#8220;<a href=\"https:\/\/www.granitefirm.com\/blog\/us\/2021\/10\/16\/venture-capital-unicorns\/\" target=\"_blank\" rel=\"noreferrer noopener\">Venture capital and unicorns introduction<\/a>&#8220;<\/li>\n\n\n\n<li>&#8220;<a href=\"https:\/\/www.granitefirm.com\/blog\/us\/2022\/02\/17\/venture-capital-and-unicorn\/\" target=\"_blank\" rel=\"noreferrer noopener\">Global Venture Capital and Unicorn Report<\/a>&#8220;<\/li>\n\n\n\n<li>&#8220;<a href=\"https:\/\/www.granitefirm.com\/blog\/us\/2023\/06\/24\/traitorous-eight\/\">Traitorous Eight, the origin of the semiconductor and venture capital industries<\/a>&#8220;<\/li>\n\n\n\n<li>&#8220;<a href=\"https:\/\/www.granitefirm.com\/blog\/us\/2022\/08\/09\/the-power-law\/\">The Power Law<\/a>&#8220;<\/li>\n\n\n\n<li>&#8220;<a href=\"https:\/\/www.granitefirm.com\/blog\/us\/2021\/10\/16\/venture-capital-unicorns\/\" target=\"_blank\" rel=\"noreferrer noopener\">Venture capital and unicorns introduction<\/a>&#8220;<\/li>\n\n\n\n<li>&#8220;<a href=\"https:\/\/www.granitefirm.com\/blog\/us\/2022\/02\/17\/venture-capital-and-unicorn\/\" target=\"_blank\" rel=\"noreferrer noopener\">Global Venture Capital and Unicorn Report<\/a>&#8220;<\/li>\n\n\n\n<li>&#8220;<a href=\"https:\/\/www.granitefirm.com\/blog\/us\/2022\/08\/09\/the-power-law\/\" target=\"_blank\" rel=\"noreferrer noopener\">The Power Law<\/a>&#8220;<\/li>\n<\/ul>\n\n\n\n<p><em><strong>Disclaimer<\/strong><\/em><\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><em>The content of this site is the author\u2019s personal opinions and is for reference only. I am not responsible for the correctness, opinions, and immediacy of the content and information of the article. Readers must make their own judgments.<\/em><\/li>\n\n\n\n<li><em>I shall not be liable for any damages or other legal liabilities for the direct or indirect losses caused by the readers&#8217; direct or indirect reliance on and reference to the information on this site, or all the responsibilities arising therefrom, as a result of any investment behavior.<\/em><\/li>\n<\/ul>\n","protected":false},"excerpt":{"rendered":"<p>In addition to venture capital firms, accounting firms, law firms, consulting firms, private equity funds, investment banks, and wealth asset managers; these types of large companies are usually partnerships\u2500\u2500unless they are companies To go public, it will be reorganized into a limited company.<\/p>\n","protected":false},"author":1,"featured_media":28215,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[83,1296,1295,91,420,543,544,1297,206,84,85,11,34],"tags":[166,48,49],"class_list":["post-28213","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-startup","category-accounting-firm","category-consulting-firm","category-entrepreneur","category-founders","category-investing-advisory","category-investment-banks","category-law-firm","category-management-team","category-private-equity","category-venture-capital","category-buffett","category-wealth-management","tag-acn","tag-brk-a","tag-brk-b"],"_links":{"self":[{"href":"https:\/\/www.granitefirm.com\/blog\/us\/wp-json\/wp\/v2\/posts\/28213","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.granitefirm.com\/blog\/us\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.granitefirm.com\/blog\/us\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.granitefirm.com\/blog\/us\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.granitefirm.com\/blog\/us\/wp-json\/wp\/v2\/comments?post=28213"}],"version-history":[{"count":18,"href":"https:\/\/www.granitefirm.com\/blog\/us\/wp-json\/wp\/v2\/posts\/28213\/revisions"}],"predecessor-version":[{"id":28878,"href":"https:\/\/www.granitefirm.com\/blog\/us\/wp-json\/wp\/v2\/posts\/28213\/revisions\/28878"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.granitefirm.com\/blog\/us\/wp-json\/wp\/v2\/media\/28215"}],"wp:attachment":[{"href":"https:\/\/www.granitefirm.com\/blog\/us\/wp-json\/wp\/v2\/media?parent=28213"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.granitefirm.com\/blog\/us\/wp-json\/wp\/v2\/categories?post=28213"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.granitefirm.com\/blog\/us\/wp-json\/wp\/v2\/tags?post=28213"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}