If you’re looking to scale your business up, the Partnership Agreement is a thing you should be circling about.
It is very important to know that when you’re venturing into a business with more than one individual, a partnership agreement should be implemented. But first, what is a partnership agreement? A partnership agreement is a contract that specifically clarifies the duties of both sides, the liabilities of both parties, and the percentage of profits each individual gets, in accordance with the other conditions of partnering with each other.
Remember that not all partnership agreements are the same as each other. Yet, there are some factors that should be noted of. These are:
You can’t label anything in this world without giving a name for it. That’s why your partnership agreement should have one as well. The fact that it’s a legal document with certain rules, conditions, and arrangements laid out on it, it should have a name that matches its standard.
To have your partnership agreement legalized, it should be registered with the county’s clerk office and have all sides signed up.
Roles Of Each Individual
Like a contract within an organization, a partnership agreement should include the role of each individual that is included in the partnership, as well as the limitation of their roles, together with the percentage and shares that they will get for the whole business.
A partnership agreement should also include escape plans for both sides in the case that an individual pulls out from the partnership.
Most of the time, we partner ourselves to individuals that may or may not opposite minded with us. This is the beginning of any dispute about anything in this world, including business matters that could probably arise some time down the line in the future.
With a partnership agreement on hand, it may save you from any dispute in the future, to lessen the chances of the worst-case scenarios when it comes to business. That way, sweat, blood, effort, time and money should not be spilled.