Liability!
You need to have a clear understanding of who has access to what.
Do you trust this person?
By becoming a partner you gain a lot of access to the other partners. In a good relationship, they can take care of things on behalf with only limited knowledge on your part.
In a bad relationship, they can do things with your consent with only a limited knowledge on your part.
It goes both ways at the same time. Discuss limits of control, knowledge and anything else that could affect each other. A Partnership gives similar access to each other as a marriage does. So, make a contract to define things ahead of time rather than wondering about them later on.
And register that contract with the county, so if things do go bad you have a legal tool to go off of.
Your contract should cover each person’s responsibilities, ownership, where does money come from, how is it divided, spent and saved, what happens if the company breaks up because of disagreement, death, someone just wants to leave. What did each of you bring to the company (including knowledge and experience)? Put everything in there you can think of, especially if it is over things you don’t want to think of.
If you ever get into a bad spot the judge will go with:
- First: Anything illegal will be addressed.
- Second: Anything not covered by the first is covered by the Partnership agreement.
- Third: Anything not covered by the first two is covered by the judge’s understanding of general practice.
- Fourth: Anything not covered by the first three items is covered by the judge’s opinion.
If you take anything away from this post. MAKE A PARTNERSHIP AGREEMENT/CONTRACT and REGISTER IT WITH THE COUNTY.
MKDesign 