The success behind so many businesses is in strong partnerships. The good ones are built out of inspiration, common goals, trust, and respect. And in the beginning—especially for younger entrepreneurs just starting out—partners offer a support system to each other. They can create business models, new products and services, and often combine resources such as specific experience, talents, and just as importantly, capital. There are often obstacles in opening new businesses, and challenges in keeping them open, but with a strong partnership (that may include several individuals) it is often easier to handle the difficult times.
No matter how strong the friendship or business relationship may be, however, it is critical to lay the groundwork for the future with a strong business partnership contract created by an experienced attorney like Shane Coons. It’s much easier to create a comprehensive structure in the beginning when you are in sync with your partners and able to communicate readily about your expectations and roles in the business.
Along with outlining financial responsibilities, the partnership contract should also include salary information and how and when any profits will be disbursed. A dispute resolution clause is important too—and can be comprehensively detailed while everyone is getting along in terms of how any major legal disputes would be handled, whether with litigation or alternative dispute resolution. No one wants to be thinking about an exit strategy when they are just entering a business either, but a clause regarding dissolution is crucial, detailing what should happen if one partner should leave.
One item that is commonly overlooked in the business partnership contract is a discussion of the role spouses may play if one partner dies. Even before that, you may want to consider the spouses of potential partners before you even go into business with each other. Is that someone you might want to work with (and in the present, have frequent contact with as they come into the office to see their spouse, or call regularly) in the future?
If your partner’s shares have been passed to their spouse or other family member after their death, you could find yourself in business with them. How these issues are to be handled should be discussed in depth between you and your partners in the beginning as the contract is created—and you may want to discuss details for repurchases in the case of a partner’s death. Protecting your business from divorces is important too as assets could be in question, and your business attorney should be able to advise you on how to devise a contract with all these complexities in mind.
Do you have questions about a legal dispute or a business partnership contract and what role spouses could play later? If so, contact Attorney Shane Coons. Our law office represents clients involved in a wide range of businesses and legal issues, and we would be glad to review your case and help you explore your options. Call now at 949-333-0900 or email us at Shane.Coons@seclawoffices.com.