If you are looking a good way to start a business, making a business partnership might be the best way. You will be joining collective vision of the business, complimentary skills and money from various foundations. However, a lot of these business partnerships are ending with bad relationships. Usually, this is happening because the business partners are incapable of planning and making decisions together.
If you want to avoid or prevent some of these problems, you should try to establish a legal foundation for the business. Here are some of the most common legal mistakes that are responsible for ending business partnerships:
Having a Legal Partner
Sometimes business partners don’t even plan on having partners, but it happens unnecessarily. Of course, there are plenty of advantages when you have a business partner such as having someone to help you with money investments, someone that will take half of your responsibilities away. However, there is an easier way to get some other professional opinion, hiring an employee or self-regulating contractor. By hiring employees, you will still get the other opinion and still have the 100% control over your business.
It is expected that each partner invests to the capital of the business. However, these investments might not be equally split between two partners because they didn’t sign a formal agreement. It is never a smart decision to hope that the other partner will have some manners and invest the equal amount of money into the business. That’s why it is of great importance to have some kind of a legal agreement signed that says clearly how will be the investing money split between two business partners.
Not having an Operating Agreement
One of the biggest legal mistakes that business partners do is that they don’t have an operating agreement signed. That operating agreement should have been signed when the business was created. These operating agreements are important because they specify how some of the business legal issues will be taken care of. If a business doesn’t have such an agreement, then bad things such as conflicts can happen that will result in the business failing. If you need help with the operating agreement, you won’t find a better person than your law lawyer. With your law lawyer, you can discuss all the important details of your business agreement.
This agreement can help you prevent some legal issues even before they happen. In this agreement, important things will be dissolved such as which one of you will have the determining word. If your agreement is well conscripted, you should know exactly how the two of you partners need to operate the business. With such agreement, you shouldn’t have any legal problems with your partner.