Starting a business is an exciting experience, especially if you are pursuing a lifelong passion. However, building a company from the ground means several tough decisions. Having a partner to make decisions with may relieve some of the burdens.
But with every partnership comes a long, legal contract. It’s critical that the agreement includes specific details to ensure a successful collaboration – each person’s responsibilities, provisions for daily tasks and what happens if the company dissolves.
Making decisions
As stated previously, large and small choices pop up every day while building a business. In a partnership, you have to consult with your partner on almost every decision to assure that you are both on the same page. The contract should include how you will make both approach decisions and what to do if there is no census.
Resolving disputes
Partnerships involve teamwork and many compromises. When you and your partner do not agree, there needs to be a process establishing for solving any issues. You can consider mediation, arbitration or even court if the disagreements become too severe to handle on your own.
Handling surprise circumstances
Unexpected situations happen all the time. It makes running a company exciting and nerve-wracking. Luckily, a contract can help address possible surprises in the future such as a partner getting sick, a buyout, early retirement and modifying the partnership. The more an agreement addresses, the less likely a surprise will damage your business in the future.
Dissolving the company
The document should also include what happens if the partnership comes to an end through a dissolution. It allows you and any partners to dissolve the business in the eyes of the state. It also gives everyone realistic expectations about exiting the company.
The benefit of crafting an agreement is that the contract is customizable to your specific business and partnership. Consult with a legal expert to draft a deal that benefits all partners that are involved.
