Every business is different, but one central theme prevails in all: you cannot do it alone. And while many business owners may be able to create and start up a business by themselves, there is usually a strong team put quickly into place, responsible for a variety of different tasks—from customer service to accounting to human resources. For one reason or another though, you may be founding a new company with one or more partners on board. Many entrepreneurs find this a healthy way to enter the business world, brainstorming and innovating with other like-minded individuals, as well as being able to share responsibilities for startup capital, the workload, and even some of the stress and anxiety involved.
You May Spend A Lot of Time with Your Business Partner
In a partnership, you have one or more business peers to lean on, whether that is financial or not. The relationship can be like a marriage in many cases—and sometimes it may seem like work obligations force you to spend more time with your business partner than you do your spouse. With nearly 30 million small businesses registered in the US today, that makes for a lot of partners—and unfortunately, disputes too. No one likes to see a long-term relationship with someone they have worked with go downhill though, and especially not one that escalates into a nasty court battle.
A Thorough Partnership Contract Could Save You Later
Just as with so many trusting couples who dismiss the idea of prenuptial agreement, partners in the initial glow of the business startup may neglect to create the proper partnership contracts. Getting started on this paperwork while the going is still good is key however. While it may seem awkward at first, setting up all the rules of the partnership at the beginning means you can formulate a plan not only for how you will proceed at the start—but also the end.
The basics should be covered as to which titles each partner will hold, decision-making power, job duties, and how profits will be disbursed. Just as important though are exit strategies discussing what will happen should one or more partners decide to leave—or what will happen to their shares if they die. A dispute resolution clause may prove indispensable later too, giving you the flexibility ahead of time to choose whether any legal issues would be settled through classic litigation processes or alternative dispute resolution instead, such as arbitration or mediation.
Contact Us for Help
Do you need legal assistance with a business dispute? If so, contact the Bolender Law Firm. Our attorneys are experienced in representing clients in state and federal courts, at both the trial and appellate level. Call us at 310-320-0725 now or submit an easy consultation request online. We are here to help!