Running a business can be a highly competitive endeavor and it’s a lot for a single owner to take on if they’re on their own. This is where having a business partner can be beneficial. Business partners can share responsibilities in terms of investment, promoting the business, shouldering financial burdens and managing team members.
As with all legal relationships, business partnerships should be clarified via contracts. The following are some of the key concerns that a partnership agreement should address.
Defining the stakes
Some partnerships work on a 50-50 basis in terms of profit shares, but that doesn’t have to be the case. This is something that should be clearly outlined in an agreement. Partners should know how much financial investment they are going to have to put in and for what return.
Business partners may differ in terms of strengths and weaknesses. For instance, one partner may be adept at reaching out to clients, while the other may have a talent for crunching numbers. The roles and responsibilities of each partner should be clearly outlined in a partnership agreement. This can help the business stay on course and also prevent disputes down the line.
Few business partnerships last forever, and it’s important that partners know where they stand in terms of dissolving the partnership. The terms of partnership dissolution should be included in an agreement. Failure to include these terms could result in lengthy and costly legal disputes down the line.
Business partnerships can be fruitful, as long as they are backed up by watertight legal agreements. As you make key decisions for your company, it will benefit you to seek legal guidance to better ensure that your interests are safeguarded as you’re moving forward.