Whether you are currently a business owner in the state of California or you are starting a new endeavor and you want to do so with a family member, friend, or colleague it is extremely important to outline how your partnership will work. The more you can define at the beginning of your joint venture the better you can iron out issues that could arise in the future. Ultimately, the hope is that your business partnership goes well, you are profitable, and your relationship stays intact.
Being able to start a business or expand your own with someone you value and trust can make the whole experience more rewarding. It can also be very helpful to have another party to work with when difficult business decisions or other challenges come up, which they likely will. When you get to work with another party or more than one party who shares your vision, your work ethic, and your passion the whole endeavor can become quite exciting.
Why Do You Need A Business Partnership Agreement?
At the beginning of a joint adventure, it may seem like there is no way that problems with your relationship or serious disagreements could arise. Businesses can be complex and highly emotional. Things can change over time and if they do, there may be a good reason to end a partnership.
A business agreement that is properly written can dictate how a clean break in a partnership will happen. If there is a major disagreement, a comprehensive business partnership agreement will also be able to address this problem and help resolve it more amicably. Then it could be possible to keep a partnership whole. It is important to work with a skilled and knowledgeable Los Angeles business attorney when you are drafting your partnership agreement in Southern California. A business partnership agreement attorney can help you address future operational challenges and future issues.
A solidly written and thorough partnership agreement will address all outcomes and issues that have the potential to arise. The most important aspects of a detailed partnership agreement in California include:
- How much money, time, and property is going to be contributed to the partnership by every applicable party.
- When more capital is necessary to keep the business running, how will these funds be procured? Who is responsible for making these decisions?
- What specific roles will each party be responsible for in the business? Divide up who has authority for each aspect of business operation. Will anyone party have the final say on decisions or will decisions be made collaboratively?
- Who is the main decision-maker with regard to overall business operation decisions? If it must be a joint effort to make decisions and no agreement can be made, what happens then? Potentially, if an agreement cannot be made on a specific decision, then it should be noted that there will be no action taken on it.
- What is the process of taking on loans and other types of debt? How will the debt be authorized? What happens if one party takes on debt without following the established procedures?
- How will partnership dissolution be handled? A breakup of a business partnership can come by way of death, disability, a desire to leave the operation, or other reasons. When this happens, there must be a defined way to exit.
Speak to a Los Angeles Business Attorney Today
Joining forces with other parties has its benefits and pitfalls. To keep your business running smoothly and to ensure it continues to turn a profit no matter what happens, an all-embracing agreement must be put together and agreed upon. Call the Los Angeles business litigation attorneys at Leiva Law today to schedule a free consultation at (818) 519-4465. During your consultation, you can learn more about the benefits and process of putting together a solid partnership agreement.