You’ve got a great business idea. Even better, you’ve got a best friend, a sibling, a cousin or an acquaintance that you think will make an excellent business partner.
Together, there’s probably no goal you can’t accomplish — but you need to make sure that you’ve got a partnership agreement in place.
Why do you need a partnership agreement?
Far too often, novice entrepreneurs see a partnership agreement as a signal that they can’t really trust each other and the relationship is doomed to fail. In reality, that document is there to minimize trust issues and smooth out problems before they start.
What should go into your partnership agreement?
Partnership agreements are as varied as the businesses and people who have them, but here are the basics that every agreement needs to cover:
- Who owns what part of the company? Numbers (percentages of ownership) are something that you can’t afford to have misunderstandings about — not today when you’re just starting, and certainly not tomorrow when you’re successful.
- Who contributes what to the business? Is one partner the brains and the other holding the purse strings? Is one partner the creative talent and the other a marketing wiz? Put it all in writing so you know who guides what aspect of the business if a dispute arises.
- How will disputes be resolved? Everybody disagrees over things from time to time, but the fact that there’s money and a business involved can make things heated. Putting a method of dispute resolution in place can make for a solid future.
- What happens when someone wants out? Down the road, your partner may want to move out of state, or you may want to cash everything in and retire. Establishing a plan for the dissolution of your partnership today is the wisest move to make.
It can be very hard to be objective about your business partnership agreement. Working with an experienced Clearwater attorney can make the entire process much easier on you both.