Managing Partner: Definition, Duties and Importance
Updated March 10, 2023
A managing partner is responsible for handling the day-to-day operations of a business partnership. These professionals take on two significant roles, as both an owner and a manager. By learning about the responsibilities held by these individuals, you can understand the value they provide to a business. In this article, we discuss managing partners, including their importance and typical duties, along with several steps you can use as guidance for pursuing this role.
What is a managing partner?
A managing partner represents an individual who has an ownership interest in a company and also manages its day-to-day business activities. This position exists within companies structured as partnerships and limited liability companies (LLC). They play a more active role than other partners, which may include general, nominal or silent partners.
A managing partner functions similarly to a CEO, as these professionals implement and manage strategies that promote their organization's mission and vision. While a CEO reports to a board of directors, the managing partner reports to an executive committee made up of other partners for approval. The managing partner collaborates with this committee or takes their direction to set organizational goals. This professional is responsible for ensuring that the business meets these goals and operates smoothly.
Why are managing partners important in business relationships?
When two or more individuals start a business, they may form a legal relationship known as a business partnership. Each partner invests money into the business, giving them ownership interest. As a result, they receive the impacts of the business' profits and losses. There are several different partnership structures that affect the liability held by partners, known as general, limited and limited liability partnerships.
As mentioned, a managing partner plays an essential role in this relationship because they handle day-to-day management responsibilities. Without establishing a managing partner, all the other partners would share these responsibilities. Allowing several people to control these tasks at once could lead to confusion and, potentially, disagreements. As another benefit, enabling one partner to take on these responsibilities frees the other partners to focus on high-level business matters. They still play a significant role in establishing their organization's overall mission, values and goals, working with the managing partner to put plans into action that support them.
Related: Guide To Business Partnership Roles
Duties of managing partners
A managing partner oversees the day-to-day operations of a company and helps make essential business decisions. Their responsibilities may vary depending on their organization or industry. Some of their typical duties include:
Working with the executive committee to set organizational strategies and goals
Implementing organizational policies and procedures
Communicating and collaborating with stakeholders, including executives and employees
Monitoring day-to-day business operations
Reviewing financial activities, including accounting tasks, budgets, financial statements and reports
Overseeing hiring and firing activities, along with payments and evaluations
Ensuring the business complies with relevant laws and regulations
Assessing organizational and personnel performance, implementing changes as needed for improvements
How to become a managing partner
There is not one specific route to becoming a managing partner. However, you can use the following steps as guidance if you are interested in pursuing this career path:
1. Pursue a bachelor's degree
You can start your career by pursuing a bachelor's degree, which typically takes about four years to complete. This role is responsible for managing the daily operations of a business, so you may want to consider a degree in business administration or management. These programs focus on the fundamentals of business, including business operations, analyses and strategies. For example, typical coursework topics include operations and financial management, accounting, economics and business policy and strategy. This educational background can provide the knowledge and skills needed to develop and implement strategies and perform management tasks.
2. Seek experience through internships
During school, you can gain business experience through internships. As a business major, you may identify business development or management internships that can help prepare you for the future. In these programs, you can get a first-hand view of how businesses operate and hands-on experience performing relevant tasks, such as performing analyses or managing projects.
Managing partners work within a variety of industries, so you can choose to pursue internships in your desired field. For example, if you enjoy the hospitality industry, you may see opportunities at a restaurant or hotel group. No matter what role you serve as an intern, these experiences can help you understand the day-to-day operations of businesses in this industry. These insights can also teach you about the challenges of working in the industry, which may help you assess your interest in it.
3. Gain professional experience
After graduating from school, you can begin pursuing a full-time job in your desired field. Experience working in management roles can demonstrate your readiness to take on the responsibilities of a managing partner. You often need to start with entry-level roles within businesses, eventually progressing your career to the manager or even vice president positions.
Progressing your career from entry-level to management roles demonstrates your strong work ethic and ability to take on additional responsibilities. Serving in these roles also proves that you know how to use your business knowledge and skills to promote organizational goals. When you can show that you have experience managing a business or employees successfully, it can make future employers or business partners more willing to trust you to take on such duties at their organizations.
4. Consider obtaining an advanced degree
While not required for this role, pursuing an advanced degree can further develop your business knowledge and expertise. When applying to jobs, this degree may also set you apart from other candidates. You can obtain a Master of Business Administration (MBA), which teaches you the technical, managerial and leadership skills needed to pursue a career in this field. You will learn about topics related to economics, finance, accounting, entrepreneurship and marketing.
Consider researching MBA programs to identify whether this is the right step for you. You can find programs that allow you to pursue a degree as a full- or part-time student, including in-person and online options. Often these programs provide a combination of in-class learning and real-world projects. Similarly, you may consider pursuing a master's in management degree, which typically takes less time to complete.
5. Build your network
Your network consists of individuals you interact with that could benefit your business career. These connections can exist in your personal life, such as friends, family members or people you meet while participating in activities. You can also find connections through your educational and professional experiences, such as fellow students, professors, coworkers and supervisors. Joining industry associations can also introduce you to other professionals in your field.
No matter where you are in your career, you should take advantage of opportunities to maintain and grow your network. Your connections should serve as resources to offer you professional guidance or assistance. You can use their help to advance your career or discover new opportunities. As an added benefit, people who know you well may be more interested in entering a business partnership with you because you already have an established sense of trust.
6. Apply for managing partner positions
As you gain experience working in business management roles, you can begin to seek managing partner opportunities. Along with reaching out to your network, you may find such positions through online searches and job boards. Managing partners represent ownership in a business, so these companies may seek individuals who can invest in the business and get it started.
When looking through job postings, make sure to read them carefully to understand the employer's expectations. When you believe you meet them, you can begin preparing application materials that demonstrate how your skills, knowledge and experiences enable you to perform the job successfully. You also will want to highlight your achievements thus far in your career, proving that you know how to manage a business and achieve its goals.
7. Form a partnership
Rather than applying for managing partner positions at other companies, you may find an opportunity to create a business partnership. Pursuing this option will require planning, as you will need to go through the process of starting a business, including gathering funds and registering with your state. Again, you may identify such opportunities through your network. When you come up with a business idea and find individuals to partner with, you can offer to serve in the managing partner role. Use your relevant experiences and achievements to demonstrate why you would make the best fit for the job.
Authority and liability of managing partners
In terms of authority, the managing partner serves as an agent of the LLC. An agent refers to someone who acts on behalf of another person or an organization. They can make business decisions, such as contract negotiations, buying and selling assets and hiring and firing employees. Meanwhile, non-managing or silent partners do not have such authorities. As mentioned, managing partners report to their companies' executive committee much like CEOs reports to their companies' boards of directors.
Due to their additional responsibilities as managing partners, these individuals tend to hold more liability. In a general partnership business structure, all partners have liability for the business's debts and actions. A limited partnership comprises general and limited partners, and the limited partners do not hold such liabilities.
When companies obtain legal status as an LLC, it establishes a separation between the business entity and its owners or partners. As a result, they do not hold personal liability for their company's debts or lawsuits filed against it. However, the managing partner has some liability as it acts as an agent of the company. Lawsuits related to the ordinary course of business—or its day-to-day transactions and practices—affect managing partners due to their direct involvement in such activities. As mentioned, these individuals have the authority to negotiate and sign contracts, which leaves them open to legal liabilities and responsibilities.
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