Most companies have several associates. An associate is either a physical or legal person. A company must be led by an affectio societatis, a Latin expression that means that the associates interact between them to make profits and, if necessary, contribute to the losses. So you need to look for a partner who has the same objectives and shares the same values as you.
The association also helps to benefit from skills you do not have. Consider your future partner’s expertise and their experiences. For example, if you have a technical profile (engineer, craftsman), it may be worthwhile to partner with someone with business or marketing skills, who will bring that expertise to your company.
Sometimes, it becomes necessary to seek a fresh injection of money for your business. A capital increase, in this particular situation, allows partners to invest their money in your company, thereby becoming your associates.
To sum it up, pair up with people who share your values and objectives for the company you are building while also providing expertise or additional resources (financial or operational) for a successful business venture.
An associate naturally has rights and duties. These rights are both political (decision making) and financial (entitlement to profits).
A partner, for instance, holds the right to vote at general meetings. This right to vote is proportional to the number of shares held in the company. This means that if you own half of the shares of your company, your voice counts 50% in decisions concerning the business.
The concept of having partners implies that most decisions should be taken collectively with all your associates, or at least after obtaining their opinions.
Having associates also involves the sharing of profits and losses. To partner up is to give up a share of potential profits, but also increase the opportunities for achieving them.
Company law provides a multitude of tools to organize the power and authority of the associates, and to supervise the operating rules between partners in the business.
Depending on the countries, the law provides more or less sophisticated ways to organize relationships between associates.
When the law is not specific or suitable enough, it is always possible to draft contracts or agreements to organize the relationship between partners (e.g. with a shareholders’ agreement).