If you’re starting a new business with a partner, there’s a good chance that this is someone that you have known for some time. Maybe they are a family member or a close friend, and the two of you have been talking about starting a business. Maybe there’s someone that you already work with and whom you know fairly well.
Either way, the fact that you already know each other means that you may be tempted to start your company without putting any sort of contract in place. You may decide that you won’t use a partnership agreement. But would it be smarter if you did have one drafted before your company opened?
A partnership agreement is always a good idea
No matter how much you trust the other person, it’s always wise to think about creating a partnership agreement. It can help you to resolve disputes that may arise in the future or help you see what steps you need to take to exit the company.
The partnership agreement isn’t just for if things go south. It can also help you while you’re on good terms and running the business together. It can define what your role is going to be and what responsibilities your business partner has. It can establish your base pay rate and what should be done with any money that the business earns outside of that. Essentially, it just sets up a lot of the rules for the business so that you and your new partner are always on the same page.
If you’d like to set up one of these agreements, take the time to carefully consider the legal steps that are necessary and have experienced guidance.