It is highly unlikely that when you are in the folds of creating your business partnership you will be concerned about the future and whether or not you will fall out with your partner.
But it is often the case that partners will blame each other if a business fails to prosper, and this will inevitably lead to a partnership dispute. Whether it’s a partnership of solicitors, accountants, or even GPs, it is therefore essential for all partners to have a written partnership agreement drawn up by a solicitor who is experienced in this field.
Although a written partnership agreement is not a legal requirement, it is essential for all involved to protect themselves from any future business partnership dispute or legal action. You will naturally not expect any problems of this kind when the business is starting, but none of us can see into the future, and it is only sensible that both you and your partners know where they stand. But what should you include in you partners agreement.
It should, of course, be an agreement on which all involved are decided. The business will not run smoothly if any of the partners are unhappy with the agreement. But there will probably need to be an element of compromise from all partners, and the way that the partners work together when drawing up a partnership agreement will be a good indication of the way they are willing to work together in the future, through good times and bad.
Above all, a written partnership agreement is there to protect and safeguard the partners. Having a written and legal document will set out exactly where each of the partners stands, their share of the investment and their responsibilities. Any business partnership dispute which may occur in the future can be largely avoided if the terms of the agreement are adhered to.
Of course, the written partners agreement need not be set in stone. As your business grows, individual circumstances will change, and things that were not thought about at the time of the agreement being drawn up may have to be included. This is just one of the benefits of a written agreement. It is flexible, and can be amended at any time, but it is the most sensible course of action to make sure that all partners’ responsibilities and roles are set out clearly, to avoid future misunderstandings or business partnership dispute which would have arisen if any partner were not clear about what was expected of them, and what they expect from each other.