It is interesting to note how many partnerships were formed over a weekend. You meet someone at a party on Friday and by Monday you are in business together. No courtship, no honeymoon, just off you go into business. Well, let me suggest that such partners secure a good set of boxing gloves, because they are going to need them.
Which partner will handle various functions of the business should be decided at the outset. Who will make the final call when a major decision has to be made? Who will be in charge of telling an employee he/she is terminated? How many hours will each partner work in the business? Will spouses have a say in the business decisions?
Every partnership, even a very well planned one, is destined to terminate. It will come to an end because one partner dies, or wants to retire, or gets divorced and leaves town. You name it, there are endless reasons why, but sooner or later every partnership ends. So why not address the split-up at the time the partnership agreement is being put together.
Oh, you say, we don’t have a written agreement. We are good friends or brothers and, therefore, no agreement is necessary. Well, if one of you dies and the survivor is facing a lawyer for the deceased or a lawyer for the orphaned children, a written agreement of understanding will come in very handy.
Get with your attorney after the Friday party, but before Monday morning, and write a proper partnership agreement. You, your new partner, and your business will be better for it.
A final thought. Do you even need a partner? Unless you need a partner for financial reasons or you need technical expertise that you can’t get by hiring an employee, don’t take on a partner. You will find running the business and making business decisions much easier.