Are You and Your Partners on the Same Page?
Many businesses with multiple partners operate without a formal written agreement of any kind, or a contract that only outlines the very basics of the operation. The issue I see time and time again is that these types of agreements are just fine until there is a major disagreement, and then there is no guidance or protection for what could have been a relatively easy issue to resolve. Instead, the issue snowballs and can tear a business apart. Here is my list of ten issues to discuss and document with your partners before they become an irreconcilable disagreement. To ensure you are protected, you should always work with an attorney to enter into a contract with your partner(s). Whether your business is brand new, or has existed for many years, it is never too late to protect your interests and the business.
1. Contingency Planning: what happens if a partner decides to leave, or is forced to leave the company?
2. Changing the Compensation Plan
3. Different Roles of Partners: what happens if someone isn’t doing their fair share?
4. Hiring and Firing Employees
5. Dissolution: how will you wrap up the business?
6. Splitting Company Assets/Equity
7. Strategies for Unexpected Growth
8. Capital Contributions
9. Vacations and Leaves of Absence
10. Grounds for and Method of Removal or Expulsion of a Partner