The main legal advantage of a written partnership agreement is that it provides evidence in the event of internal or external litigation. However, in the absence of a properly developed partnership agreement, these benefits may be denied by minor disputes that would otherwise be avoided by the terms of a written agreement. They think nothing can or will go wrong. They trust each other so much that they never bother to get a written partnership contract. What could go wrong in this scenario? The short answer: a LOT! Before entering into a partnership, it is advisable to get a lawyer to prepare a formal agreement that states that partnerships are an important part of any business and an important consideration for those who are leaving. You need to think about how to build strong and productive relationships with your customers, suppliers and regulators, to name a few. But it may be the key partnership that underpins your new business, the relationship with those with whom you launched this project, which could pose the biggest problem on the journey, since your business is growing, diversifying and doing better. It is really important to understand the legal status of your business partnership from the beginning and to set some ground rules to protect the interests of all. A written partnership agreement should contain provisions for the protection of minority partners. Such a clause, the “tag along” provision, protects minority owners in the event of a third-party purchase. If a majority shareholder sells its shares to third parties, the minority shareholder has the right to be part of the transaction and to sell its shares on similar terms. The advantage for the minority owner is that he can avoid being in business with an unwanted new co-owner. This provision also ensures that all partners receive similar takeover offers and protects minority owners from the adoption of much less attractive offers.
RESERAGE A NAME The first step in creating a partnership is to book a name that must be made with the Secretary of State`s office or its equivalent. Most states require that the terms “company” or “partner” be included in the name to show that more than one partner is involved in the business. However, in all states, the name of the partnership should not be similar to that of another company, limited liability company, corporation or individual company registered with the collaborative state. Compared to an individual business that has essentially the same form of business, but with only one owner, a partnership has the advantage of allowing owners to rely on the resources and know-how of the partners. Having a clean, though easier, can also be a permanent fight. But with partners sharing responsibility and reducing workload, partnership members often find that they have more time for other activities in their lives. The rules for winding up a partner`s departure due to the death or withdrawal of the transaction should also be included in the agreement. These conditions could include a purchase and sale agreement detailing the valuation process or require each partner to purchase life insurance that designates other partners as beneficiaries.
Please direct requests and inquiries to Rhiannon Richards - Sr. PR & Communications Manager, 22837 Ventura Blvd, 3rd Floor, Woodland Hills, CA 91364 or call 818-225-5100 ext 249 or firstname.lastname@example.org