Should You Sign Business Partnership Agreement With A Close Friend Or Relative?

Business partnerships have been an important part of entrepreneurship and startup success, but sometimes things don’t go as planned, as a result business partnerships end in a bad note. That’s why it is important to have a business partnership agreement in place even if you are entering into a partnership with your best friend or relative. Here are some of the top reasons to have a business partnership agreement, brought to you by BizBoon-the best way to build b2b network connections.

What should a partnership agreement contain?

A partnership agreement include the partnership's business name, the partners’ roles, authorities and responsibilities within the business, how much each contributed and their allocations of profits and losses. Partnership agreements also detail buy-out agreements or how companies plan to carry on or dissolve if partners withdraw or pass away.

Advantages of business partnerships

1.      States ownership clearly: Investment in a business is not always monetary, an investment can include providing the building or other real property for the business, as well as specialized equipment for the business. A partnership agreement spells out exactly who owns what percentage of a business, eliminating chances of dispute, assert the experts at BizBoon-the best way to find business partners.

2.      Resolving disputes: While partnership may have been started by close friends, disagreements are natural in any relationship, and it can be helpful to determine how the partners will work out these disagreements as they arise.

3.      Clarifies roles of each partner: A partnership agreement sets out roles, listing the duties and position of each partner to the arrangement. This helps reduce confusion and arguments among members about what each person should contribute.

4.      Beneficial for business: A Partnership Agreement is a legally binding document and allows the partners to structure the relationship in a way that suits their particular business.

No matter how strong your relationship with your business partner may be, sometimes it is easy to get carried away by emotions. A business partnership agreement protects the rights of both the partners while taking the business in a positive direction. For more such advice on company formation in India or to connect with professionals worldwide, visit BizBoon at-https://bizboon.com/