Business partnerships often start out with high hopes and a common vision and can end up in the courts with arguments over assets. To avoid the expense and stress of a business relationship break up – sign a partnership or shareholder agreement. It is like a business pre-nup where you and your partner(s) agree at the outset about the nature of your relationship and what will happen if either of you disagree or decide you want to leave.
Having an agreement in place from the outset is a must. If there’s no written agreement outlining specific arrangements, all partners are legally equally responsible for decisions made on behalf of the business. This results in all partners sharing profits, but also losses equally.
Our team will ensure your agreement covers such things as:
- How much money each partner brings into the partnership
- How the profits will be divided and what the salaries will be
- What each partner will do in the company – the different roles and responsibilities
- Who is going to provide the financial reports
- How partners can access bank accounts and funds
- How disagreements are to be handled
- What is to happen if a partner wants to leave or the business is to be sold
- What rights will departing partners have if they want to start a similar business
While a partnership agreement won’t cover you against all eventualities, it will go a long way to saving you time and money in the case of a disagreement or the end of the relationship.
The team at Sajen Legal have acted for business clients for many years and prepared hundreds of shareholders agreements. It is important to have the experience of a lawyer who has expertise in this area of law to assist in the preparation of the appropriate agreements.