While owning and operating a business in New York can be a rewarding endeavor, it can also be highly demanding at times. Entering a business partnership could allow you to share responsibilities with other parties, and such arrangements may also open doors to additional business opportunities.
Prior to entering a business partnership, you may feel it necessary to build a strong foundation for the arrangement by setting forth clear and concise terms via a partnership contract. While this step of the process may prove vital, knowing what to include in this agreement could also prove complex in nature.
There may be a multitude of topics to address when drafting a partnership contract, some of which could be easy to overlook at times. Some examples of these topics could include:
- Plan for the unexpected: While it might be impossible to predict what the future might bring, understanding what types of unexpected changes may arise could help you create contingencies for every possible outcome.
- Partner responsibilities: It could also be helpful to set clear terms concerning each partner’s responsibilities and how much control each will have on business decisions and daily operations.
- Valuation and revenue: Part of protecting your financial interests could include setting forth terms regarding the valuation of business assets and shares, and determining how to calculate business revenue.
- Setting goals: Discussing the desired goals for the arrangement could also be integral to building a foundation that aligns with the interests of all business partners involved.
- Partner protections: Other topics to avoid overlooking could include addressing insurance coverage, partnership rules and provisions on what takes place if a partner is going through a divorce.
It could also be in your best interests to cover topics like buy-sell arrangements and the next steps to take should the arrangement fail to go according to plan.
Protecting your interests
Business partnership contracts can cover a multitude of topics, many of which may provide benefits and protection to all parties involved. Taking time to carefully consider all your options may help you better prepare to work toward drafting an agreement that best aligns with your needs and interests. Taking a thorough approach to this process could help mitigate risk, promote an atmosphere of positivity and growth, and help you enter the arrangement with the confidence to take on whatever comes your way.