Your business deserves a professional partnership agreement.
The Partnership Agreement (also called Operating Agreement or Shareholders Agreement) is a legal contract between the owners of a business. It determines the rights, responsibilities, and remedies available to each partner.
When you go through the process of drafting a custom Partnership Agreement with an attorney, you have to consider dozens of factors. A good small business attorney knows the right questions to ask to protect you and your business from trouble.
Example questions answered by the Partnership Agreement:
- What will happen if one partner dies or becomes disabled?
- Who has the right to buy or sell equity in the business?
- When can one partner be forced out by the others?
- How will the purchase price be calculated in the event of a buyout?
- What protections will keep the minority owners from being oppressed by the majority?
What can go wrong if you jump into a business without a professional Partnership Agreement?
- You could be forced out of the business by your partners
- You could get stuck with partners who aren’t contributing
- You could have your effective percentage reduced
- You could be frozen out of profit distributions
- You could be forced to spend thousands of dollars in costly shareholder litigation
No business should operate without a good Partnership Agreement, and nobody should throw their time and money into a business without one. Talk to a small business attorney today.