Business partnerships are complicated relationships that must be managed with complete documentation. Regardless of who the partnership includes, there are issues of ownership share, profit share and survivability that at one time or another can cause a complication within the workings of a business partnership. Therefore, it is highly recommended that any type of partnership in a business be fully detailed in a business partnership contract.
Interestingly enough, partnerships that own property (viewed as an investment rather than a business) make the crucial mistake of missing a partnership agreement. Keep in mind that if you are an investor or a co-contributor to any activity involving others for the goal of making a profit or collecting revenue you are indeed engaged in a partnership. There is no end to the horror stories of families, friends and business partners of all types being involved in disputes over the terms of these partnerships. You can’t be too cautious when it comes to these things.
We provide below a sample image taken from our legal partner RocketLawyer.com. These contracts are meticulous in nature and for that reason at Samplewords we’re relying on the experts in the field to help us. by following a very simple interview process, you can begin work on your business partnership agreement online in seconds. This is a free document as a special offer from Samplewords and you’re welcome to give it a try for free. Follow the link to give RocketLawyer’s Business Partnership Agreement builder a try.
According to the SBA (Small Business Administration) there are six crucial elements to a business partnership agreement which are:
- Percentage of ownership such as who owns how much of the business.
- Allocation of profits and losses, detailing usually as a factor of ownership, how much profit and/or liability is incurred per partner.
- Who can bind the partnership or more clearly, Who has the authority to engage the partnership in contractual obligations or conduct activity as a representative of the business itself.
- Designation of key decision makers and guidelines for decision making as an organization.
- Death and/or dissolution measures for a partner.
- In what manner will disputes be settled in the future.
These are the key items of any business partnership agreement but there cal also be many others depending on the nature of the business. To read this helpful article from the SBA click here.