Starting a business with a partner can be fun. It can also be disastrous. There are a few very important
steps to take when forming a partnership to make sure everyone involved is protected. In a partnership, it is absolutely necessary to create a partnership agreement. This agreement contains several key details that are essential to the smooth operations of a business partnership. All partners and their individual commitments and responsibilities should be detailed in the agreement. Additional skills of partners should be listed as well, as they will be used to configure, ownership percentage, profit, and loss allocation, and owner distributions. Rules for taking loans from the company as well as rules for leaving the company should also be identified. Standards on how much the business should retain before making a profit and loss split. The profit and loss split should be clear. Yes, you must split the losses as well as the profits. Terms for adding new partners, initial contributions, and management duties, are just a few of the important things that should be included in your partnership agreement. We are here to help as always as we can assist you and your partner in putting all the details together. This agreement should be made concrete by taking it to a lawyer or notary and having both parties sign off. This agreement doesn’t just save your business, it saves the previous relationship between you and your partner. Many don’t realize how important it is until a loss comes into play and it has to be split. Save your friendships and save your relationships by forming a partnership agreement.