Starting your own business is extremely difficult; starting it alone can make things even more challenging. This is why many people choose to work with at least one business partner.
In an article on our website, we discuss the important of having a well-drafted partnership agreement. Without this critical document, the success of a business could be in danger and a business owner’s rights, responsibilities and financial obligations could be dramatically impacted. In order to protect yourself, the business and the interests of your partners, it can be crucial to have a clear and enforceable partnership agreement in place.
According to an article in Forbes, there are at least five different clauses that should be included in these agreements. These five clauses should address:
- Financial contributions and expectations
- Decision-making roles and guidelines
- How much partners will earn and what limitations there are on taking money out of the business
- What will happen should the business fail
- What will happen should one of the partners pass away
There may be a number of additional clauses that need to be included based on the business and what partners want to protect, and it can be important to discuss these issues with the support of an attorney.
A partnership agreement can only be effective when it is properly drafted and includes legally enforceable terms. Starting a business can be difficult enough without adding in a legal battle over issues not addressed in an agreement or a dispute with a partner over existing clauses. Working with an attorney to draft these agreements and other types of employment contracts can be a good way to protect a business and the interests of business owners.