Forming New Partnerships and Law Firms
Would you go to a foreign city without a map (or a comparable iphone app)? If so, you may spend a lot of time wandering in circles. Starting a business is much the same. The most successful partnerships are those which are either very, very lucky or they have clearly and specifically articulated their expectations and created contingency plans to address potential problems. Even those who have legal contracts in place often neglect to address some basic issues that can lead to bad blood down the line. Do you and your partner agree on all basic issues, such as:
- What will you do with profits?
- What happens if one of you is incapacitated or loses interest in the work?
- What happens in the event of a financial downturn?
- Under what circumstance would you add a new partner or buy out the other partner’s interest?
- How will the partnership interest be valued in the event of a buyout?
- How will you decide if your respective performance is adequate?
If you think you know the answers to these questions, that is a great start. But unless there is a signed document memorializing the agreement you still have a very high probability of problems down the line.
Check out our free download: 11 Essential Issues to Consider Before Entering a Business Partnership