Some business partnerships seem perfect until they encounter challenging situations or disputes that seem impossible to resolve. However, some circumstances could be inevitable, especially when the business involves multiple entities with various functions in day-to-day operations.
Fortunately, many ways exist to approach and resolve issues between business stakeholders. Still, one of the best ways to get ahead of partnership concerns is by addressing them in an agreement. A business partnership agreement can include the following to address disagreements between the involved parties:
- Each partner’s contribution and stake: Defining these matters early in the partnership could be beneficial later. These details include responsibilities, funding, time and other resources.
- Business ownership and profit distribution: Dividing business ownership is vital to decision-making. A partnership agreement should also have defined distribution terms for profits and salaries.
- Procedures for finalizing business decisions: Multiple business partners could disagree if they have conflicting opinions. Establishing fair and impartial procedures could help avoid conflicts when making decisions.
- Process for resolving disputes: Disagreements and conflicts between partners are sometimes inevitable. Fortunately, enforcing a dispute resolution process using the partnership agreement could address these situations.
- Guidelines for dissolution and other crucial scenarios: Specific developments can significantly affect the business, requiring elaborate procedures and legal action. Whether terminating the partnership or buyouts, involved partners can include clauses in the partnership agreement to tackle these events.
Considering these issues might seem pessimistic, but foreseeing these potential issues could save a lot of trouble in the future long after signing the partnership agreement.
Drafting an agreement that meets business needs
It is easy to look online for a partnership agreement template. However, this document might fail to consider a partnership’s unique requirements. Investing in reliable legal services can be worth it in these situations.