Starting a business is one of the most important decisions you will make in your lifetime. Going into business for yourself means freedom from taking orders from others, and you will benefit directly from the hard work that you do. One of the most common business arrangements is a partnership. The partnership is a business structure where the company is owned by more than one party. Partnerships are often made between two people, but they can be made with several or more parties. Forming a fair partnership is the first step towards creating a successful business.
Determine Your Goals
Before you choose a partner, consider your goals for the business. Many business disputes can be avoided when partners have the same vision. Consider both your short-term and long-term goals. Communicate with the potential partners before you make a financial commitment. Understand what you and your partners expect from the company. For example, do you plan on working in the business on a full-time basis, or do you plan on managing from afar? How will new employees be hired, and are family members allowed to work for the company? How long do you expect the business to last? Under what circumstances will you need to end the business? Talking about these common situations ahead of time can avert any surprises in the future.
Create a Business Plan
A business plan is a document that outlines every aspect of the business. While a business plan isn’t necessary, it is advisable to have one. The plan is especially helpful when partnering with another person or group of people. The plan ensures that everyone is on the same page, and it also can help to resolve problems, or keep them from occurring. There are many different business plan templates available, but it is usually best to create a document that is specifically for your business. You can do this with help from an experienced business lawyer.
Make It Legal
When you begin a business with friends or relatives you may not see the need to create a partnership contract. It is important to know that you must file the proper paperwork in order to form a legal partnership. In fact, when working with friends, a contract becomes an essential way to prevent disagreements from getting out of hand. Before beginning the business, have a skilled business attorney review the documents to ensure that you are forming a fair partnership.
This blog should be used for informational purposes only. It does not create an attorney-client relationship with any reader and should not be construed as legal advice. If you need legal advice regarding Forming a Fair Partnership, or any other litigation matters, please feel free to contact Roger C. Decker at 480.461.5343, log on to udallshumway.com, or contact an attorney in your area. Udall Shumway PLC is located in Mesa, Arizona and is a full service law firm. We assist Individuals, families, businesses, schools and municipalities in Mesa and the Phoenix/East Valley.