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Roles and Responsibilities in a Business Partnership

Set clear expectations from the start of your partnership

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In Short

  • Clearly define each partner’s roles and responsibilities to avoid misunderstandings and disputes.
  • Establish decision-making processes, including voting rights and key decision areas.
  • Prioritise regular communication and formalise arrangements in a written partnership agreement.

Tips for Businesses

Document roles, decision-making procedures and dispute resolution mechanisms in a formal agreement. Schedule regular meetings and use communication tools to stay aligned. As your business evolves, review and update your arrangements to keep them relevant and effective.

Business partnerships can be a powerful way to combine talents, resources and expertise to create a successful venture. However, the success of any partnership heavily relies on clearly defined roles and responsibilities. Without proper delineation, misunderstandings can arise, leading to conflicts and potentially jeopardising the business. This article examines the essential aspects of establishing clear expectations in a business partnership.

Defining Roles and Areas of Responsibility

One of the first steps in establishing a successful business partnership is clearly defining each partner’s roles and areas of responsibility. This process involves a thorough assessment of each partner’s strengths, weaknesses and expertise, allowing for an optimal allocation of tasks and duties.

Assessing Individual Strengths and Expertise

Begin by conducting an honest evaluation of each partner’s skills, experience and areas of expertise. This assessment should consider both technical skills and soft skills, such as leadership abilities, communication styles and problem-solving capabilities. By understanding each partner’s unique strengths, you can allocate roles that best utilise these attributes.

Clearly Outlining Specific Responsibilities

Once you’ve identified each partner’s strengths, it’s crucial to clearly outline specific responsibilities. This should include day-to-day operational tasks, strategic planning duties and any specialised roles within the business. Be as detailed as possible to avoid ambiguity. For example, instead of simply assigning ‘marketing’ to a partner, break it down into specific tasks such as ‘developing marketing strategies’, ‘managing social media accounts’ and ‘overseeing advertising campaigns’. The more clarity is provided from the outset, the more it will minimise the risks of misunderstandings and future disputes.

In some areas, there may be an overlap in skills or interests between partners. It’s important to address these overlaps and decide how responsibilities will be shared or divided. Similarly, identify any gaps in expertise that may need to be filled, either through additional training or by bringing in external resources or people.

To illustrate how roles and responsibilities might be divided in practice, consider the following examples:

  • In an accounting firm partnership:
    • Partner A (Tax Specialist): Responsible for managing the tax department, overseeing complex tax planning strategies and staying up-to-date with tax legislation changes.
    • Partner B (Audit Specialist): In charge of leading the audit team, managing client relationships for audit services and ensuring compliance with auditing standards.
  • In a restaurant partnership:
    • Partner A (Culinary Director): Handles menu development, kitchen management and food supplier relationships. 
    • Partner B (Operations Manager): Manages front-of-house operations, staff hiring and training and customer relations.
  • In a digital marketing agency partnership:
    • Partner A (Content and SEO Strategist): Leads content strategy, SEO (ie, search engine optimisation) services and client account management.
    • Partner B (Advertising and Growth Director): Oversees paid advertising campaigns, social media marketing and business development.

These are merely examples of how partners can divide responsibilities based on their individual strengths and expertise. However, it is also important to note that while partners may have primary areas of focus, they should still collaborate and communicate regularly to ensure the overall success of the business.

Documenting Roles in a Partnership Agreement

Once roles and responsibilities have been agreed upon, it’s crucial to document them in a formal partnership agreement. This legal document should clearly state each partner’s duties, areas of authority and any limitations on their decision-making power. Having this in writing can prevent future disputes and provide a reference point if questions arise about each partner’s responsibilities.

Establishing Decision-Making Processes

Clear decision-making processes are vital for the smooth operation of a business partnership. Without established procedures, partners may find themselves in a deadlock or making decisions that the other partner disagrees with, leading to conflict and potentially harming the business.

Determining Voting Rights and Procedures

Decide how voting rights will be allocated among partners. This could include equal voting rights for all partners, weighted voting based on ownership percentages, or other agreed-upon criteria. Establish clear procedures for conducting and recording votes to ensure transparency and accuracy.

For example, a partnership might establish that all major decisions require a 75% majority vote, with each partner’s vote weighted according to their ownership stake. They could specify that votes must be conducted during official partnership meetings, with at least 7 days’ notice given to all partners. The procedure might require that votes be recorded in official meeting minutes, detailing the motion, the votes cast and the outcome. By clearly outlining these procedures in their partnership agreement, partners can ensure transparency and fairness in decision-making processes.

Identifying Key Decision Areas

Outline which decisions require unanimous agreement and which can be made by individual partners or by a majority vote. Typically, major decisions such as taking on debt, admitting new partners, or changing the nature of the business require unanimous agreement, while day-to-day operational decisions are left to individual partners within their respective areas of responsibility.

Significantly, the classification of key decision areas ultimately depends on the specific business in which the partnership operates. For a local retail partnership, major decisions requiring unanimous agreement might include expanding to a new location, taking on significant debt for renovations or significantly changing the store’s product offerings. In contrast, routine decisions such as ordering seasonal inventory within pre-agreed budget limits or adjusting store hours during holiday seasons might be left to individual partners or decided by a majority vote. Partners should carefully consider their business’s unique characteristics when:

  • defining which decisions require full partner involvement;
  • ensuring the process is both efficient; and 
  • tailoring to their specific needs.

Implementing a Dispute Resolution Mechanism

Despite best efforts, disagreements may still arise. In this case, you should implement a clear dispute resolution mechanism in your partnership agreement. This could involve mediation, arbitration or other agreed-upon processes to resolve conflicts when partners cannot reach a consensus through normal decision-making channels.

Regular Review and Adjustment

Business environments change, and so do partnerships. Accordingly, establish a process for regularly reviewing and adjusting decision-making procedures as needed. This helps ensure that your decision-making processes remain effective and aligned with the evolving needs of your business and partnership.

 

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Privacy Policy

About this policy

METRISCOPE Financial Pty Ltd (METRISCOPE) recognises the importance of privacy and is committed to protecting the privacy of individuals when handling their personal information.

This Privacy Policy explains in an open and transparent manner how METRISCOPE will collect, hold, use, disclose, protect and otherwise handle your personal information in accordance with the Australian Privacy Principles contained in the Privacy Act 1988 (Cth).

When you provide METRISCOPE with personal information you consent to its use, disclosure and handling of your personal information in accordance with this Privacy Policy as amended from time to time.

Your Personal Information METRISCOPE collects and holds

METRISCOPE will collect and hold your personal information for the purposes of providing our investment services and products to you.

The kinds of personal information that we may collect and hold include your name, date of birth, tax file number, email address, home address, phone number and bank account details.

Where you do not provide us with all or some of your personal information that we request then we may not be able to provide you with our services.

Personal information collected and held

METRISCOPE collects your personal information directly from you and through our intermediaries when you complete fund application forms. METRISCOPE may also collect data from its registry services.

Other ways METRISCOPE may collect your personal information includes in person or by telephone, letter, facsimile or email.

METRISCOPE may hold personal information collected in both physical and electronic storage facilities including paper-based files and computer databases.

How METRISCOPE uses and discloses personal information

METRISCOPE may use and disclose personal information collected and stored to enable us to provide the financial services and products to you and for other related legal purposes.

For example, we may use and/or disclose your personal information to:

  1. verify your identity;
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  3. comply with laws, regulations, rules, directions or requests from METRISCOPE’s regulatory bodies and/or other government agencies;
  4. comply with METRISCOPE’s own internal policies and procedures.

Where it is legal and necessary to do so, METRISCOPE may disclose your personal information for the purposes described above to our suppliers, contractors, professional advisers, government agencies and regulators or parties involved in the management of your account.

These third parties may be in other countries where laws in relation to the processing of personal information are not consistent with the Australian Privacy Principles or the Privacy Act.

While METRISCOPE may take steps to try and ensure that these third parties do not breach the Australian Privacy Principles in relation to your personal information, the overseas recipient may breach the Privacy Act and/or the Privacy Principles and this may be due to that countries own laws.

By providing us with your personal information you accept that we may make disclosures to overseas recipients on this basis.

METRISCOPE will protect your personal information

METRISCOPE will take all reasonable steps to protect your personal information it holds from misuse, interference and loss, and from unauthorised access, modification or disclosure using both physical and electronic security measures.

By providing us with your personal information over the Internet you accept that such information will be transmitted at your own risk as the security of such information cannot be guaranteed.

METRISCOPE will not retain your personal information, unless required by law, if it is no longer needed for any purpose for which we may lawfully use or disclose it.

Access, correction and complaints regarding your personal information

You may request METRISCOPE to provide you with access to any of your personal information held by us. You should promptly notify METRISCOPE if you become aware that any of your personal information held is inaccurate, out-of-date, incomplete, irrelevant or misleading.

If you have any concerns about whether METRISCOPE has complied with this Privacy Policy or the Privacy Act you can raise your concerns with our Compliance Manager.

You can contact our Compliance Manager via email, fax, telephone or by post on the details set out below. Our Compliance Manager will investigate your complaint and advise you of the outcome.

If you are not satisfied with our response you can complain to the Office of the Australian Information Commissioner.

You can contact our Compliance Manager using the contact details below:

Compliance Manager

compliance@metriscope.com.au

Phone: 02 9659 3955

Fax: 02 9659 4912

Address: PO Box 2036, Castle Hill NSW 1765

We will acknowledge receipt of a complaint within 1 business day, however, where this is not possible, acknowledgement will be made as soon as practicable. We will then investigate the complaint and respond to you within 30 days. Some complex matters may require an extension to thoroughly investigate the complaint and bring it to resolution. If additional time is required, we will advise you in writing.

If you are not fully satisfied with our response, you can contact an external body. In cases of privacy related complaints, this is generally the Office of the Australian Information Commissioner (OAIC).

The contact details for OAIC are:

Mail GPO box 5218 Sydney NSW 2001

Phone 1300 363 992

Email enquiries@oaic.gov.au

Online www.oaic.gov.au

You may also direct privacy complaints related to financial advice to the Australian Financial Complaints Authority (AFCA). The contact details for AFCA are:

Mail GPO Box 3, Melbourne, VIC 3001

Phone 1800 931 678 (free call)

Email info@afca.org.au

Online www.afca.org.au

Privacy Policy updates

We may update this Privacy Policy from time to time to take into account changes in our practices for the handling of personal information by publishing an amended Privacy Policy. You should regularly review the most recent version of this Privacy Policy.

Complaints Policy

Complaints Resolution

If you have a complaint we would like you to tell us so that we can address the matter. We are committed to the efficient and fair resolution of complaints.

How you can lodge a complaint

If you wish to make a complaint, please contact our Compliance Manager on the information below:

Compliance Manager
compliance@metriscope.com.au
Phone: 02 9659 3955
Fax: 02 9659 4912
Address: PO Box 2036, Castle Hill NSW 1765

Our complaint process is free of charge to you. Your complaint does not need to be in writing. If you require any assistance to lodge your complaint, please let us know. You may also choose to authorise a representative to make a complaint on your behalf.

We are bound by the Privacy Act, and we manage and protect your personal information in accordance with the Australian Privacy Principles.

How we will deal with your complaint

We will respond to your complaint in a timely and flexible manner. Our goal is to ensure the earliest possible resolution and we will try to resolve your complaint wherever possible at the first point of contact. Where your complaint is urgent it will be prioritised.

We will ensure you have the opportunity to explain your complaint. To this end we ask that where possible, that you provide the following information about your complaint:

We will address your complaint fairly and consistently, treating each complaint in an un-biased manner, and ensuring all allegations are investigated thoroughly. We will inform the financial adviser or mortgage broker involved about your complaint and ask them to respond to us.

Once your complaint is resolved any agreed outcomes will be implemented in a timely manner.

How and when we will communicate with you about your complaint

We will acknowledge the receipt of your complaint within 1 business day verbally or in writing.

Where this is not possible, acknowledgement will be made as soon as possible.

We will investigate your complaint promptly and respond to you within 30 calendar days. Our response will include:

If we are able to resolve the complaint to your complete satisfaction within 5 business days, we may not provide a written response unless you request a response in writing.

Some complex matters may require additional time to thoroughly investigate the complaint and bring it to a resolution. Where additional time is required, we will advise you in writing within 30 calendar days of receiving the complaint. We will explain the reasons for the delay.

We will communicate openly throughout the process.

If you are not satisfied with the resolution of your complaint, you can lodge a complaint with the Australian Financial Complaints Authority (AFCA).

Your right to lodge a complaint with AFCA

If an issue has not been resolved to your satisfaction, you can lodge a complaint with AFCA. AFCA provides fair and independent complaint resolution that is free to consumers. The contact details for AFCA are:

Mail GPO Box 3, Melbourne VIC 3001
Phone 1800 931 678 (free of charge)
Email info@afca.org.au
Online www.afca.org.au

About this Policy

We may amend or update our Complaints Policy as required by law or as our business processes changes.