Law Tips: Tips For Your Business Partnership Agreement
Posted on: 19 November 2015
You've always wanted to start a business, and you are finally seizing that opportunity with the help of your partner. You may want to make sure you do everything right because business partnerships are somewhat similar to a marriage: everything must be in sync. The following guide will show you a few things to consider when drafting up a business partnership agreement.
What The Agreement Should Include
It might be helpful to first--before you and your business partner get started with this agreement--understand what both you and your partner expect out of your partnership. Hopefully going over some of the things most business agreements cover should shed a light on what factors to discuss.
The Name
One of the first things you and your partner should agree on is the name of the business. You can register your business name beforehand, or come up with a temporary fictitious name that is not taken, which you change later.
Contributions
You and your partner should agree on what is to be contributed by each party and how that translates into the percentage owned by each partner.
Personalizing UPA
One of the most important functions of a business agreement is that you will be giving you and your partner an opportunity to personalize regulations set forth by UPA. UPA or The Uniform Partnership Act covers universal laws that apply to partnerships. These laws will govern your partnership by default unless you and your partner agree on what works best for your business. These regulations do have some state-specific regulations, so it is best to get guidance from a business law specialist when tackling this portion of the agreement.
Business Authority
Business authority must be cleared before you finalize your business agreement because the UPA states that a partner can enter an agreement without the consent of the other partners. You need to state otherwise, should you and your partner want to be consulted about any and all agreements before entering any business-related agreements.
Inner-Decisions
You should come up with a system for decision-making that you both can agree on, which you can put in writing on your business agreement. This decision-making system can be anything from votes or decisions based on the responsibilities of each partner.
Make sure you include how you and your partner will admit new partners should your business need to expand.
You can talk to a business law specialist about other things that you need to include in your business agreement; although, it is advisable that you let this agreement be handled by a law specialist completely to reduce the chance of mistakes.
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