McBride for Business Blog

Hidden Risks

April 7, 2017 // R. Shawn McBride // No Comments »

R. Shawn McBride recently spoke on hidden risks.  Here is the transcript: 


Good morning folks, R. Shawn McBride with you here live talking about the hidden risks in partnerships. We hear a lot about partnerships and the risks. Partners can get into arguments, can destroy the value, and a lot of people say just don’t do partnerships. I’m in the opposite camp. I think partnerships are really good when done correctly, can be done very strategically if you clearly understand what everybody is doing, and if you keep the partners on a clear understanding of how everything works together. Partnerships aren’t necessarily bad, but there are some hidden risks out there.

This comes from the fact that people are not careful about how they talk about their partnership and how they structure their partnership. Happened again. I just had another client reach out to me. They’ve entered into a partnership. They signed a bunch of documents about the partnership. And then they formed an entity. Unfortunately, now they’ve created a paper trail calling it a partnership. If you don’t form an entity around your company and you engage in a partnership, you’re likely going to be what we call a “general partnership.” A general partnership is generally bad because every owner of the partnership has unlimited liability for anything that goes wrong in that partnership, meaning their personal assets are fully exposed.

We also see people sign documents for entities that don’t protect them from liability because they have capital contribution clauses that are uncapped, or they have other obligations in there that circumvent the liability protection they’re supposed to be getting. A lot of hidden risks there.

The big thing is you’ve got to understand what you’re signing. You’ve got to understand what the legal meaning is. Partnership agreement — absent it being a limited partnership or other entity –means every partner has unlimited liability and their personal assets are exposed to business liabilities. This is bad. We want to think about these things in advance.

Be very careful with your partnerships. Get them done correctly. Get some people involved. Get some lawyers involved. Get a team around you. Work on things. Make things work correctly for you. Hopefully, you get the right team around you so you can avoid these risks and enjoy the economic benefits of partnership. Because I believe they’re there.

Partnerships can make a lot of money. Look at some of the big successful companies: Google, Apple, Microsoft, all your technology companies. Ford even had partnerships at different times. A lot of your big successful companies had partnerships, people helping each other, bringing together different skills and values and ways that we would talk about in my 3 Laws of Empowerment speech. You can do it, and it can be done correctly. You’ve just got to do it carefully.

Check out our blog, www.mcbrideforbusiness/blog. It will give you some great ideas about partnerships and how to make them really work. If you’ve got a company — need some corporate training, want somebody to talk to your workforce about living their lives, their dreams, doing the things they want to do, engaging in business the way they want–  to make them more motivated employees, I’d love to come in and join your group and help you facilitate that and bring some great lessons. Corporations are loving it. Would love to help some more audiences with it.

I’m R. Shawn McBride signing off. If you have any questions, comments, concerns, just drop them here in the box. Send me a direct note. Would love to tailor some content to you and your needs. Talk to you soon.

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This posting is intended to be a tool to familiarize readers with some of the issues discussed herein.  This is not meant to be a comprehensive discussion and additional details should be discussed with your attorneys, accountants, consultants, bankers and other business planners who can provide advice for your circumstances. Each case is unique.  Past results do not guarantee future outcomes. This article should not be treated as legal advice to any person or entity. Isabela.


About the Author

R. Shawn McBride is the Chief Innovation Officer at McBride For Business, LLC.  His signature keynote, The 3 Laws of Empowerment(, gives audiences an entertaining look at how they can prepare, plan and protect themselves. You can reach R. Shawn McBride at info@mcbrideforbusiness.comor (214) 418-0258.


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Posted In: Business, Risk

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