What should go in your partnership agreement?

What should go in your partnership agreement?

On Behalf of | Mar 3, 2020 | Business And Commercial Law |

As you and your business partner team up to start a new company, you understand that it’s wise to have an official partnership agreement. You don’t just want to shake hands and hope for the best. That puts your company, your investment and your career at risk.

Even so, you’re not 100% sure what you should put into your partnership agreement. Where do you begin? While every company is unique, here are a few things you should start with:

Your ownership percentages

Are you going to split the company 50-50? Even if you are, get it in writing. If you’re not going to divide things down the middle, you definitely need to write down the percentages and how they impact your roles within the company.

What tasks you’ll perform

Running a company may require you to wear a lot of different hats and do many different jobs. If there is anything specific for each of you, make sure you get it down in the agreement. This helps hold you both accountable in the future.

How you can leave

You’re not planning to leave the company, and neither is your business partner, but that day may come. Does that mean the remaining partner has to buy the other out? What are the rules? Can you leave and start a similar company or should that be prohibited? It’s best to plan for the future, even if you never have to use that clause.

Getting started

These are just three things to consider, and all they should really do is get you started. Make sure you carefully consider all of the steps you’ll need to take.