When you start a business on your own, you could face many more hurdles that you may not have to worry about if you instead worked with a partner. If you have a partner, you can solve potentially complex business problems and split all important duties, halving your burden.
If you decide to go this route and find the perfect partner for your business, you then need to create the foundational document that will govern your partnership. In general, you should follow three topics when creating this document.
Why should you have a partner?
Forbes takes a look at different forms of partnerships. Each one will have different needs and as such, you may need to change the language or details of your agreement to suit the partnership you aim for. However, you should always cover three things: profit and loss division, ownership and decision-making duties.
Profit and loss division
Profit and loss division is relatively self-explanatory. How will you split the profit in the event that your business venture brings you success? Likewise, how will you allocate your losses if your venture ends up suffering from them? This agreement should also make provisions for events like a partner death or withdrawal.
Ownership relates to your contributions to the venture, which may not always end up equaling out. Ownership will most often reflect each partner’s contribution to the venture, but you can define ownership in whatever way you and your partner wish.
Finally, decision-making duties. Who will handle the big decisions? How will you manage any disputes that arise between you? Which partner will hold primary authority for decision making? If you start off your venture with these provisions in place, you will have a much sturdier foundation.
Starting up a business involves managing a huge number of moving parts at once. Working with an experienced business law attorney can help you ensure that all of your bases are covered – both organizationally and legally.