You and your partner decide to start a business. You have a great service or product, you’ve decided on a name, you created a logo and created a catchy sales pitch. You’re all ready, or are you?
Most start-ups or small business don’t create a formal partnership agreement detailing the duties of each partner to each other and to the business.
A partnership agreement outlines the day-to-day operations, how to split the profit and what happens if one of the partners wants out or dies.
Think of a partnership agreement as a pre-nuptial and a will for your business. It lists how the business starts and how it ends.
Most people go into a partnership not thinking anything bad will happen and that any issue can be resolved.
Before you start investing money and time into the new venture, setting out a partnership agreement is one of the most important things you can do. Planning for a worst case scenario at the start will help you and your partner resolve this issues if they ever occur.