Now that the time has come to get your new business up and running, you could not feel more excited. You and your future partners may have had the idea for your company for a considerable amount of time before finally reaching a point at which your ideas could become a reality. Of course, before you can open your doors, you will likely need to get the finer details in order when it comes to how your company will run.
Though working with other individuals may have been the idea from the start, you may want to remember that working with partners does not always mean that operations will run smoothly. Certainly, disagreements may come about, but you could take steps to help everyone remain on the same page. Creating a partnership agreement may be one of those steps.
Why create an agreement?
A partnership agreement can help you and your partners understand what your business relationship entails. You can all decide how to share profits, who has what responsibilities and the process for handling any disputes that may arise among the partners.
What should you include in an agreement?
The exact details of your agreement will depend on the specific factors of your personal views and the needs of your company. Some general guidelines you may want to consider include the following:
- Business contributions — Each partner may have a specific role to play in the company, and as part of your agreement, you could detail who will make what contributions.
- Decision-making power — Are each of the partners on equal footing or do some partners have more power than others do? If only certain individuals have the ability to make important business-related decisions without consulting the other partners, that information should be included in the agreement. Additionally, you may want to include when certain decisions may require input from all partners.
- Exit procedures — It is not unusual for a partner to want to leave the company after some time or for a death or other event to occur that results in the exiting of a partner. Rather than feeling at a loss when such a situation comes about, you may want to include a plan for how to address that person’s share of the company and his or her responsibilities.
If you have concerns over what your partnership agreement should include, you may wish to find out more information on the uses of this document. Additionally, you could seek legal assistance in order to gain specific insight into what details could help better protect your company and business relationships.