Adding a partner to your new business can add support when you are struggling and suggestions when you feel stuck. More importantly, your partner can balance out your strengths and weaknesses so that you can both be stronger business owners.
Your partnership agreement is an essential part of your working relationship. It can detail your individual roles, your plans for the business and what will happen if one or both of you wants to dissolve the partnership.
Here are a few key pieces you will want to include in your partnership agreement.
Roles and responsibilities
One essential aspect of your partnership agreement is defining your working relationship. While your contract does not need to spell out every detail of what you will (or will not) do, it should give the bigger picture of your individual and collective roles.
In general, you and your partner should have an idea of your strengths and weaknesses. These abilities should help you understand what you will contribute to the company’s day-to-day operations. Your partnership agreement should capture this larger picture of where your responsibilities lie.
Knowing how it will end
At some point, your partnership will end, and your agreement should include what the end of your partnership will look like. While you may not imagine your partnership ending in a dispute, there are other ways your partnership could end, including:
- Retirement
- Death
- Buy-out
- Merger or acquisition
Your partnership agreement should give you and your partner options for handling the dissolution of the agreement in a variety of scenarios, including a dispute. While you may not want to consider an argument, including it in your partnership agreement means you will be prepared if the situation arises.
A comprehensive partnership agreement is not something you should try to put together on your own. When you talk to a skilled professional, you can get the support you need to create an agreement that supports your goals.