“A business partnership is like a marriage: no one comes in and thinks it will fail. But if it fails, it can be bad,” said Jessica LeMak, a lawyer at Voxtur. With the right agreements that I would always recommend to be written by a qualified lawyer, this makes the potential problems of business partnership much easier to solve and/or legally enforceable. A partnership agreement contains guidelines and rules that trading partners must follow so that they can avoid disagreements or problems in the future. Any agreement between individuals, friends or families to create a business for profit creates a partnership. In the absence of a formal registration procedure, a written partnership agreement clearly shows the intention to create a partnership. It also sets out in writing the cores and screws of the partnership. It is essential that trade partnership agreements be diversified and detailed in how they articulate internal processes, financial considerations, dispute resolution, accountability and dissolution. If you are willing to do business with one or more partners, it may be time to enter into a partnership agreement. A partnership agreement allows you to outline the terms of your new business relationship. You can list all partners in the agreement, as well as contribution amounts, property interest percentages, cost shares, profit shares and responsibilities. This contract can help you outline the terms of your business commitment, how the business is managed and how the partnership can ultimately dissolve. Before you sign an agreement with your partners, you need to understand the pros and cons of a partnership. An alternative business structure to a partnership is a joint venture that requires a joint venture agreement.
Since a partnership is a complex issue, we always recommend that people have partnership agreements between lawyers or other lawyers that can explain more precisely the partnership issues and ensure that the partnership agreement says exactly what it has to say.