New businesses face lots of risks, no doubt.
One of the best things you can do if you are beginning a business with a partner is to put together a partnership agreement. This legal document clearly spells out the rights and responsibilities of each partner, which can minimize the chance of a legal dispute down the road. There are lots of things that can sink a new business, but a lack of clarity concerning job responsibilities or other issues does not have to be one of them.
Each state has a uniform partnership law, but a partnership agreement can provide further specifics. Here are some of the things that a partnership agreement might address:
- What procedure is in place if one partner wishes to leave or passes on?
- How are profits going to be shared?
- What are each person’s management responsibilities?
- How does each partner contribute to cash flow?
- What is the reach of each partner’s authority?
- How would a new partner be added?
- Which partner holds title to physical property?
- How are salaries computed?
If you have a new business and are interested in a partnership agreement, an experienced attorney can help you draft this legal document. It could mean the difference between success and failure, between a healthy partnership and a failed friendship.
