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This question is about what a partner does.
Partner vs. principal
The difference between partner and principal depends on the context and your individual goals and objectives. Generally speaking, a principal is responsible for the overall success of a project, while a partner provides assistance and support.
Both roles require a high level of commitment and skill to be effective. Ultimately, deciding which role to take on should be based on your career goals and the project you are working on.
The terms partner and principal are often used interchangeably, but they have different meanings. A partner is one of the owners of a business and usually has an equal stake and responsibility in the business. A principal is an individual or company that is the majority business owner and has the most control and authority over decisions.
Key Takeaways:
| Principal | Partner |
|---|---|
| A principal is the owner of a business | A partner is a person who shares ownership of a business |
| A principal has ultimate decision-making authority. | A partner may or may not have decision making authority |
| A principal is solely liable for the business's debts | A partner is jointly and severally liable for the business's debts |
| A principal can serve as the sole signatory for the business | A partner cannot serve as the sole signatory for the business. |
| A principal is not subject to fiduciary duties. | A partner is subject to fiduciary duties |
| A principal is not typically subject to liability from the business's activities unless they are also a director or officer of the business. | A partner is liable for the company's activities as if they were the sole proprietor. |
| A principal may be paid dividends or salary depending on the structure of the business. | A partner is typically entitled to share in profits and losses in accordance with the partnership agreement |
| A principal may be paid dividends or salary depending on the structure of the business | A partner is typically entitled to share in profits and losses in accordance with the partnership agreement. |
| A principal is not required to contribute capital to the business. | A partner is typically required to contribute capital to the business. |
| A principal is not typically required to act in good faith or in the best interests of the business. | A partner is typically required to act in good faith and in the best interests of the business. |
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