Starting a partnership business requires a partnership agreement
by February 16, 2009 10:13 am 67 views
Editor’s note: Michelle Stockman works with Little Rock-based Arkansas Capital Corp. to promote entrepreneurship development around the state. Stockman earned a bachelor’s degree from Loyola University-Chicago in communications and fine arts, and earned a master’s in entrepreneurship from Western Carolina University. Her thoughts on business success appear each Monday on The City Wire.
Starting a business is hard work, and many individuals often think starting a business with a partner is an easier route.
Whether by necessity or by choice, starting a partnership business is even more difficult than going alone. Regardless of how close you are in relationship to the partner (yes, even if you are married to the partner), no business that is involving more than one owner should start without a partnership agreement in place.
Whether you have been best friends and know your partner better than they know themselves, starting a business with someone else is not the same as being their friend, sibling or spouse.
Starting a business brings new forms of stress and anxiety into one’s life. It also brings a slew of new responsibilities, tasks and decisions to make. Engaging in those new aspects of your career with someone else is often challenging and stressful in its own right.
Taking the time to develop a partnership agreement is equally as important to developing and implementing a business plan. When developing a partnership agreement, involving a lawyer in the process to create the legal document is necessary.
While the business may be a great success, the partnership agreement is a place to clearly identify each person’s role in the business, what their responsibilities are to the business, how much each partner is investing, how can a partner exit the business, how can the business dissolve and much more. While the partnership agreement may never be needed, it is an insurance policy if something unplanned were to happen.
Michelle Stockman can be reached at [email protected]