Be Smart About Negotiating Partnership Agreements

People considering creating business partnerships should use care when negotiating the business partnership agreement in order to help ensure the partnership will thrive.

2012-09-20

September 20, 2012 (Press-News.org) Be Smart About Negotiating Partnership Agreements

The U.S. is renowned for being a land of entrepreneurs. In many cases, those looking to start their own businesses join forces with like-minded individuals in order to pool resources and talent to make an even more successful business. People considering creating business partnerships should use care when negotiating the business partnership agreement in order to help ensure the partnership will thrive.

Big Picture First

People looking to establish business partnerships should clarify their business plan before trying to negotiate any of the specifics of a partnership agreement. All parties need to be in alignment regarding the goals of the partnership and have an idea of what the end result of the partnership will be, such as creating a product or delivering a service. Both parties need to agree on the process for making the product or providing the service.

Clarify Roles and Expectations

Once the parties have a solid business plan in place, they can begin to address specifics of the partnership agreement. Partnerships require contributions of capital, time and effort. The partners need to spell out who is going to contribute what to the partnership. Having specifically defined roles for each party ensures that there is no confusion about how the partnership as a whole will fund and accomplish the work that needs to happen to achieve the partnership's goals.

It is also wise at this point to precisely define the product or service that the partnership will provide, as well as the infrastructure that is necessary to make it come to fruition.

At this stage, the partners also need to decide how they will split profits and losses, as well as what will happen if one partner wants to withdraw or a new partner joins.

Hire an Attorney

After having reached consensus on the goals of the partnership and the roles each person will play, the parties should hire a lawyer to draft the partnership agreement. Some may be tempted to try to write the agreement without a lawyer, believing they will save money. However, when disputes arise in partnerships and people need to hire attorneys to settle their disagreements, they often realize that they would have saved more time and money by hiring a lawyer to write the partnership agreement initially.

Experienced business attorneys can also handle complicated intellectual property issues far more competently than those without legal training.

If you have questions about partnership agreements, contact a seasoned business lawyer who can discuss your situation with you and offer you guidance.

Article provided by The Law Offices of William D. Black
Visit us at http://www.billblacklaw.com

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