Consumer Affairs – Glenda Thompson

Ballito has become a haven for entrepreneurs from all over the country who want to live in this amazing little patch of paradise, make a living out of something they are passionate about and, at the same time, make enough money to live well.

Sometimes the business does so well that the owners decide to bring in partners to help run the show.

I have been approached by several readers over the last few months, who want me to share their tales of woe with regards to setting up business, watching it grow, bringing in a partner – who they thought they could trust – and then watching in horror as everything goes pear shaped – with the newly acquired partner heading off into the distance with the profits, or bankrupting the business – and then setting up on their own.

I do not, under any circumstances, want to mention names as this is not a name and shame column. The North Coast is just too small to hang anyone out to dry, and people tend (rightly or wrongly) to use social media to get things off their chests.

What I have found when interviewing people who have got badly hurt in business partnerships is that they have simply been way too trusting – of people who, at face value, seemed perfect for the business. No thorough background checks were done and no contracts were drawn up correctly.

It has been like peeling layers of skin off a rotten onion for most of them. Take off the top few layers and the stench underneath is unbearable. This should never happen if a solid, watertight contract is drawn up.

A partnership is a legal entity, and the basic definition is that it is an association of between two to 20 people who are contractually bound to one another to operate in a joint profit-generating business, with each partner contributing money, goods or services to a fund and agreeing that any profits made will be shared between the partners as per their contract.

As much as a partnership is quick and easy to set up – and has benefits in terms of tax – partners need to remember that they are co-owners of the partnerships’ assets and are personally responsible for the liabilities of the business – but with a right to recover a proportionate share from other partners.

I would like to suggest that new business owners make a point of joining the Ilembe Chamber of Commerce. They run regular fact-filled workshops on a variety of business – aspects. They will also benefit from the many networking opportunities that are open to members that will help their businesses to grow. Contact them on 087 354 6343 for more information.

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