When forming a business with someone else, you always have to think about the future and what could potentially happen. You may go into the agreement as great friends or people who see eye-to-eye. But time can change things.
To protect yourself, you should create a partnership agreement. The U.S. Chamber of Commerce notes this business agreement will help define your relationship and how you each contribute to the business.
One of the most important aspects of a partnership agreement is it sets expectations for the relationship. It will allow you to detail your job duties and who will handle every task involved with running your business. It sets clear lines about responsibilities and enables you to have a discussion about how you each contribute to the business.
Defining your expectations and detailing your relationship within the business is essential to avoiding problems in the future. You have a legally binding contract that tells you what you must do in the business. It makes it crystal clear who is in charge of what, so if someone drops the ball, you know who is responsible. It also removes concerns should one of you have a personal situation that could impact the business, such as a divorce, or if one of your dies. It is great protection for your business and for each of you.
To make the most of your partnership agreement, you need to make it as concise as possible. Avoid being vague and be sure to cover every single aspect of the business. In the end, this document could be what helps you avoid disagreements that could derail your business.