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3 areas to address in a partnership agreement

On Behalf of | May 9, 2024 | Business Transactions And Litigation |

You may consider starting a business without using a partnership agreement. But if you’re going to be working with someone else, this is generally not advisable. It can lead to serious disputes and legal issues in the future.

By creating a partnership agreement, the two of you get to iron out the details of the business and address some of these concerns upfront. Below are three things you may want to consider while you draft this document.

1. Roles and responsibilities

First of all, many business partner disputes happen when people run into conflicts over their roles or responsibilities. If you clearly define these from the beginning, each person knows what they are expected to do and the business runs more efficiently. You don’t have two people who are trying to make the same decisions or accomplish the same goals.

2. Financial details

You also want to think about any of the financial aspects of the business. How much money will each partner invest in the business? How are you going to be paid and how much money will you both take home? What percentage of the business will each partner own?

3. How to resolve a dispute

Finally, even with a partnership agreement in place, disputes do still happen. You may want to have an established structure for how to resolve them, such as steps that need to be taken before litigation.

Starting your business

A partnership agreement is just one of the documents you’re going to need as you launch your new business. Take the time to carefully look into all of the legal steps that are necessary at this time.

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