A recent article in the balance small business stated several ways in which a winning partnership can be accomplished. It mentioned that humans work better together by nature; that is part of being human. With the right partner, responsibilities can be shared and ideas discussed.
Partners should share the same vision. Strategic directions should meet the needs of both partners. Roles should be defined, and the skills and abilities of each partner should be recognized. One example is that one of the partners may be more skilled in marketing and advertising, while the financial arena or human resources is the strength of the other.
Partners can reach an agreement, from the beginning, as to who is responsible for roles. This may allow each individual to sign contracts. Deciding who has the authority, or if both partners have it, will help avoid conflicts into the future.
The structure of the company might be an LLC and will determine how taxes are paid. General partnerships and limited liability companies have different tax responsibilities.
The partnership agreement should be more than an oral agreement between two parties. Drawing up the agreement avoids potential problems. Some of the areas to include are: Equity invested by each partner; type of business; how profit and loss will be shared; how to correctly pay off partners and much more.
When it comes to a partnership agreement and its legalities, it should be reviewed by an attorney who specializes in small business law. Avoiding mistakes down the road is the primary goal of a dedicated business lawyer.
