-- Partners will work better together if they keep in mind the differences between their various roles, says Tony TwemlowMany of the problems associated with achieving a harmonious, professional partnership may be better understood by understanding the differences and similarities between a self-employed window cleaner, a plc and a private limited company.The simplest business unit is a self-employed window cleaner.

He is subject to no regulation and has no obligation to carry insurance.

He is the proprietor, manager and labourer rolled into one.

At the other end of the spectrum is a large plc.

Here, the roles of proprietors (shareholders), management (the board of directors) and labourers are clearly separated.

In between these extremes is a small private limited company, which may or may not be managed by the owner.

If the proprietors are not the managers, but the managers are also labourers, disputes can arise over the division of the profits between the owners of the capital (dividends) and the providers of the management/labour (directors' remuneration and bonuses).

Partners will have an infinitely better chance of working together if they fully understand the potential for conflict between the proprietor, manager and labourer.

The acid test is whether a partners' meeting is a meeting of shareholders (considering accounts, a report from management, and the payment of dividend); a board of non-executive directors (supervising and instructing, but not interfering in management, and confining itself to matters of policy); a board of executive directors (having a say on management issues); or a meeting of middle management with senior management (each pressing its own case for a greater allocation of the resources of the business).Most partners' meetings, except in very small or very large firms, are likely to be a mixture of all four.

This may be unavoidable and it is no bad thing, as long as we know which mode we are in.-- There are some serious questions to be asked before accepting a partnership, explains Tony SackerThe Partnership Act 1890 encodes the law as it stood over 100 years ago.

Some think it is sufficient, but this is not the case.

Unless otherwise agreed, the Act provides that:-- 'Any partner may determine the partnership on giving notice and every partnership is dissolved by the death or bankruptcy of any partner.' This means that a partner can turn up at a partners' meeting and announce the immediate end of the partnership.

Even 100 other partners cannot legally prevent this.-- 'No partner can be expelled.' However good the cause, there is no right to expel.

Even the court does not have this power.

The only remedy is to dissolve.-- 'All the partners are entitled to share equally in the capital and profits.' A salaried partner may claim an equal share of the firm's freehold building.-- 'Every partner may take part in the management of the firm.' Tell that to the senior partner.-- 'No change may be made in the nature of the partnership business without the consent of all existing partners.' One partner can prevent the progress of the firm.-- 'Each partner is jointly liable for all the liabilities of the firm.

A new partner is not liable for anything done prior to joining and a retiring partner remains liable for obligations incurred before his retirement.' Incoming p artners assume liability for existing obligations and outgoing partners are indemnified.-- 'Everyone who represents himself as a partner in a firm is liable as if a partner.' The most junior salaried partner is jointly responsible for the firm's debts and can commit the firm to extensive liabilities.The traditional definition of a profession as a calling in which service to clients is put before those of the business creates a collegiate atmosphere at law firms.

Maybe this is why we rush to become equity partners.

However, if you are asked to join a firm, ask yourself:-- Do I like my prospective partners?-- If yes, do I trust them? -- If I do, are they competent?-- If they are, is the financial deal worthwhile?-- Is there an adequate partnership agreement?If the answer to any of these questions is 'no' then do not join the partnership.

Partnerships only succeed if they are based on mutual confidence and trust between the partners -- and depend on a well drafted agreement.