It depends on that person present situation, first see that what is the reason that person has bad credit? And suppose now his present situation is good and you feel in future this person will be very helpful to your business then you can have partneship deal with him, because of his past bad credit you cant neglect his present reputation. I mean, if his present situation is good and that person will be very useful and capable to help your business so i think you should not have any hesitation to start a partnership with him though bad credit in past.

I personally don't think it's a great idea to get involved with a partner that has bad credit because at some point you may need a loan, credit cards, a merchant account and a plethora of other things.  If they have bad credit they better have vision, adequate capital,  and killer work ethic to make up for their shortcomings.

Hi hop_ful,   does your prospective partner have experience in the industry that you're looking to get into?  If they do then they may be able to offer more than just money to the partnership.   If you're concerned about their past history with credit, you could restrict their access to financial information and accounts.  If they have cash to contribute but also have bad credit, and you dont want that to affect your ability to get new loans, you can have them gift you the cash, and agree to profit share with them, but have them as an emplyee of the business not a partner.  This would require them placing a lot of trust in you, but would remove the bad credit aspect, and allow you to make use of their capital.   Granted I wouldn't want to do it if I were them, but if they really trust you and you want to go ahead this might be a way to achieve that.

that is one of my going concern, the part that how responsible the partner could be when it comes to the business when we are venturing into something new. many thanks for the insights.

If you decide to go forward with a partnership, be sure to have an attorney create a partnership agreement that spells out the responsibilities of each of you. Perhaps you would be responsible for financial decisions and general business operations while the other person is responsible for manufacturing or another area not directly related to finances or decisions related to finances.

I agree with mrhelpful above - perhaps your bigger concern should be why their credit is bad to start with as this might give you an indication about their suitability as a business partner'. In addition, virtually every lender in the U.S. is going to evaluate the personal credit of each and every principal with 20% or greater equity in a closely-held business - therefore if your prospective partner is going to have 20%+ equity in the business, your business will not qualify for loans (including SBA loans) from any mainstream lender for the foreseeable future. If you have plenty of funds (won't ever need to borrow) and the prospective partner has a skill set that will propel your business - then it could still be a good partnership.

many many thanks,   sincerely

your personal credit score won't affect the credit of your business, but perhaps your bigger concern should be why their credit is bad to start with as this might give you an indication about their suitability as a business partner. If they have a history of irresponsible financial activity you should be wary of allowing them any discretion in the operation for your businesses finances.