Take the time to create a good partnership agreement
It is not a big surprise that everyone
who considers entering a partnership should also think of a suitable
partnership agreement. It is surprising how many people still neglect its
importance or totally forget about it till the very last moment. The consequences are normally not great for
the businesses (like most things which are not well planned). Do not rush to be
one of these people, take the time to create a good partnership agreement.
Before even thinking of the partnership agreement,
it is essential that you know why you enter the partnership. A common answer by
many people why they have had a partnership agreement is that it seemed like a
good idea. However, many of them have problems to elaborate in what way it was
good for the business. Do not get carried away, think how the agreement can be
useful for your business. Think how it cannot be useful for your business,
either. In other words, you need to know what you expect to come out of the
whole thing. If you do not, maybe the better idea here is to reconsider your
decision to have that partnership.
After you have clarified your
expectations, you need to think how to create the partnership agreement conditions so that
they have a good chance to happen. You need to include the clauses of the
partnership agreement to justify its existence. The first and most important
thing is who the partners are. Here should stay not only their names but also
address, tax numbers, etc. The next thing to include is the object(s) of the
agreement. If you have more than one object, do not hesitate to include them in
different points. Be sure to cover everything that you think might cause a
problem. Better include something unclear than not. If you have several
different issues, it is not a problem to create more than one partnership with
the very same partner. It is not illegal and if it is justifiable, you can do
that, as well. Be aware that the administrative costs and the time involved in
the process will be undoubtedly more than a single agreement. However,
everything depends on the case – so be as flexible as you can.
It is highly recommended that the
partnership agreement be concise, clear and relevant for the particular case.
But most of all, it needs to be effective and serve its purpose. Do not include
clauses that have no reference to the agreement like hobbies, fiction, etc.
Stick to the point! If you have an agreement for apple delivery, discuss the
prices, delivery dates, quality, etc. Do not write what would happen if you get
delivered tomatoes. One hint – if you want tomatoes so much, include them in
another point. Be very clear – include quantitative measures wherever it is
possible. “Hundred kilograms” has much more meaning than “some amount, the same
is with “between 6th and 8th July” than “sometime in
July”.
