Rather than operate a business in Florida alone, you want to bring on partners and their complementary experiences, knowledge and skills. Do you know how to draft a proper partnership agreement?
Forbes offers tips for creating a solid agreement for your business and partners. Learn how to avoid disputes that may derail your company.
Distributions and contributions
How much must each partner contribute to get the company up and running? What obligations do individual partners have? Besides addressing financial contributions, break down what you expect partners to devote in terms of energy and time to your company’s success.
Also, ensure your partnership agreement discusses how you divide business profits and whether you all receive a salary. Dive deeper and explain the order of distribution and salary amount.
Because you should expect eventual business disagreements among partners, your partnership contract should address how you handle making decisions. Does one person’s word carry more power than someone else’s? Which business decisions require a united front, and which only need a single partner’s say-so?
In the months and years ahead, one partner may want to leave the business. Your partnership contract should explain whether you want to bring on new or additional partners, how you handle partners leaving the company and whether partners may buy each other out. Also, specify how you handle ownership interests regarding life events such as bankruptcy, divorce, marriage and death. You may also want to add a non-compete clause so departing partners do not become competitors.
Cover all your business bases in your partnership agreement. Thinking ahead may save a lot of time, money and energy.