You and your partner are set to go. You have a business plan in place and a launch date in sight. With the excitement of getting ready to open your new enterprise, you may think nothing could go wrong. In fact, as you and your partner made your plans, it may have felt as if you couldn't have chosen a more perfect person with which to work.
However, when the dust settles and you establish a day-to-day routine, you may begin to notice little disagreements with your partner. If you are honest with yourself, you know how quickly those little disagreements can escalate into big arguments. It may surprise you to know how many of those differences you can preempt with careful planning.
What a partnership contract includes
Business advisors frequently encourage new partners to establish a partnership agreement to protect their company from unnecessary disputes. While you and your partner have probably discussed how you will handle this or that situation, you never know how you will react in the moment. Having a written contract to guide you may go a long way to keeping a peace that will allow you to work together for many years.
Some of the important elements you may wish to include in your contract are:
- Who makes the decisions: No two people agree on everything all the time, so establishing a structure for daily choices and long-term plans can carry you through any clashes.
- Who settles disputes: There may be times when a disagreement threatens your business, and having a plan for resolution may save your company time and money.
- Who contributes what: Determining the amount of money, time and effort expected of each partner will prevent misunderstandings.
- Who gets what: Your company will need a plan for distributing profits as well as salaries.
- What happens next: One day, you and your partner will appreciate the contract that defines the passage of ownership or dissolution process if one or both of you decides to end the partnership.
These are only a few of the many factors a partnership agreement can include to maximize the chances that your business will run smoothly without letting disputes and doubts bog you down.
Since business laws are complex and the laws of the state of Ohio may come into play, you and your partner may find it advantageous to seek legal counsel as you draft your agreement. With the right guidance, you can draft a contract that will leave no uncertainties between you and your partner by covering as many potential factors as possible. An attorney will not only help you with the finer points of a legal partnership agreement, but you will receive sound advice for any contracts you wish to use in your business.