Launching your own business is an exciting prospect. You may have dreamed of being your own boss for years. Yet, you have decided to launch your IT and data security consulting firm with a partner – a former colleague you’ve remained close with over the years.
You want to create a partnership as you form your business, to formalize your joint venture. Yet how do you know what to include in a partnership agreement?
Partnership agreement basics
Some of the basic items your partnership agreement should include are the following:
· The length of your partnership
· The purpose of your partnership
· If both your and your partner or partners are general partners or limited partners, laying out who will actively manage your partnership
· The address of your business and the Minnesota law governing your partnership
· Each partner’s financial or property contributions to the partnership
· How you and your business partners will distribute your business profits and losses
Beyond the partnership basics
Other important aspects your business partnership agreement should address include:
· What each partner’s job duties and responsibilities are
· How you and your business partner will make decisions
· What standards of conduct you and your partner will follow
You also want to plan for the future in your partnership agreement. You will want your partnership agreement to address:
· How new members will be added to your partnership
· How a partner can exit from the partnership
· When your business will continue and when you will decide to shut it down
· What will happen if a business partner passes away or leaves the partnership (including how another partner can buy out their share of the business)
· How a partner can transfer their share of the business to someone else
Having a business partnership agreement in place ensures you and your business partner are on the same page. You both know what you expect out of the other and your partnership. With a business law attorney’s help, you can plan ahead for what may happen in the future and set your business up for a better chance of success.