People who go into business together usually have similar ideas and goals. While this might be a relatively good start to the situation, there are some potential pitfalls that partners need to discuss before they embark on their partnership. This may help to alleviate disputes in the future.
Take the time to discuss these areas with your potential business partner before you officially enter into the partnership. Some of the below points might need to be included in the partnership agreement:
- Financial matters. Discuss how profits and equity will be handled. This is especially important if you don’t have a 50/50 split with the company. You also need to determine who will make larger financial decisions for the company.
- Management style. Talk about how the company will be managed. This needs to include everything from employee misconduct to vendor and client relations.
- Specific roles within the company. Each partner will likely have a specific role in the company. Outline these in the partnership agreement so there is not any doubt about who is responsible for what.
- Disagreement resolution. Having ground rules for how to handle disputes is beneficial for both partners. This can include steps like having a discussion about the matter away from employees and using mediation if a mutual agreement can’t be reached between the partners.
If a time comes when you and your partner have a dispute that you cannot resolve together, you may need to turn to the legal system. Your attorney can help you to determine what courses of action you might be able to use.