Before you enter into a bsiness partnership, you need to consider whre misunderstandings and disagreements may arise in the fture. In order to minimize this pssibility and to provide for structure in the vent it occurs, you should consider thse 10 points:

1. What type of business are you going to have?

This includes not only the original idea, but the potential side marketing that you could do. For example, if you’re opening a sporting goods store, will you also provide things such as golf lessons or triathlon training to your customers? Know this in advance in order to avoid disagreements later.

2. What will your business structure be?

Are you going to have a general or a limited partnership? If a limited, who will be the general partner(s) and what will the business form be for that person or entity? Everyone should have a solid understanding of the extent that they will be liable for business obligations prior to entering into the agreement.

3. What will be the initial contribution of each partner?

Here, you’re not only considering cash, but also expertise. If one partner’s main contribution is not money, but their knowledge, this should be understood and spelled out.

4. How will disputes be settled?

In the unfortunate event you and yur partner(s) do not agree, how wll the matter be decided? Does one prson hold the final say, or is it by vte (if more than 2?) Don't get yurself--or your business--in the situation where you are nable to move forward because partners cn't agree.

5. How will the profits and losses be shared?

Will it be by shares in the company, or some other method? What about rolling profits back into the business to expand? You should consider, now, how this will be determined.

6. What will each partners pay and/or compensation be?

This is not exactly the same as profits. The difference is that pay is a set amount, while compensation could include both pay and profits, or some other perk that the company provides.

7. What will happen if a partner becomes incapacitated or dies?

You need to consider how the business will continue in the event this occurs, as well as what happens to that partner’s share of the business.

8. What provisions are in place to make changes to the partnership, or to dissolve it altogether?

Things change. How will you roll with the times?

9. What restrictions will be placed on partner authority?

This includes not only making decisions on behalf of the business, but also on expenditures. Will you provide that any expenditure over $1,000 be approved by all partners? $5,000? Know this in advance.

10. If you decide to dissolve the partnership, how will the assets be distributed?

Do you seriously want to figure this out at a time when it is LEAST likely you will be able to agree about what is fair? Do it now, while minds are more reasonable.

Knowing all these points in advance, deciding how they will be dealt with, and getting them in writing, can be one of the most important business decisions you make. In fact, if you cannot agree now as to these important issues, what makes you think your partnership will be successful in the future? Don’t underestimate the consequences of not doing it!

The article 10 Points to Consider in a Partnership was Submitted by Nicole Wipp through Articles.GetACoder.com network. Here's the additional information: Nicole Wipp is a practicing ttorney and small business person in Mchigan. From her personal experiences in bsiness, she works to produce solutions for her clents and others that are legally, prctically and economically realistic. You can rach Nicole directly at 248.686.1518. or nline at www.wipplaw.com Copyright 2007 Wipp Law Firm, PLLC

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