What To Look For In A Partnership Agreement
The partners may agree to contribute capital to the company in the form of a cash contribution to cover start-up costs or capital contributions, and the services or goods may be pledged under the partnership agreement. As a rule, these contributions determine the percentage of ownership that each partner has in the company and, as such, they are important conditions in the partnership contract. It`s also a good idea to include terms that refer to the expected contributions that may be needed before the business actually becomes profitable. For example, if the start-up investments are not sufficient to drive the business into a profitable state, the partnership agreement should include all expectations of additional financial contributions from each partner. This avoids surprises on the road for a major contributor. Although the agreement is likely to cover a partner`s general obligations, it is unlikely to meet the performance criteria normally found in other documents related to the remuneration system. Ultimately, however, joining a partnership is a certain act of faith. A thorough review of the legal and financial terms of the offering, as well as your “fit” with other partners, should help ensure a successful and fulfilling career in the firm. However, if things don`t work out, you can leave the company because you know your interests have been sufficiently protected.
As with many partnerships, things happen along the way that neither party intended to discuss at the beginning. And they could reveal attitudes or experiences that no one knew existed.