If you start a business with a partner, it is wise to create a partnership agreement at the beginning, which you will both sign. You are not obligated to do this, but there are many reasons that it can help.
Nonetheless, some people are a bit hesitant, perhaps because they think their business partner will find the idea insulting. Don’t worry. There are many benefits for both of you when it comes to using a partnership agreement. Let’s look at a few below.
Officially dividing ownership
This could be as simple as dividing ownership 50-50, but it’s good to have it in writing. It’s never wise to assume that you control half of the business, especially as it grows.
Solving disputes in advance
Disputes are inevitable and you can’t solve them all in advance, but some things can be predicted. You can set up rules that will have to be followed to resolve those disputes, such as taking a vote if there are board members or three or more partners.
Defining your roles
You may also want to define the roles that both of you are going to have as you work together at the business. It can be helpful to avoid overlap, as this can also cause disputes.
Setting your vision for the future
Finally, you can address your goals and your vision for the future of your company. It’s good for both of you to be aligned on this vision so that you can always be working toward the same end.
Setting it up
Before you start your new business, make sure you have all the paperwork in place and let you know exactly what legal steps you need to take.