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Michael Daly posted a new Legal Issues thread on 8/4/2011

Business Partnership Agreement

I need some straight forward tips and advice for people starting up a partnership. I am interested in perhaps a template Agreement and issues to be stipulated in clauses that will clarify the arrangement. I have been told not to worry about all this until we start making money. But that sounds like a red flag to me. The legal outline is the foundation.
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Andrew Clarke Responded on 9/15/2011


I would avoid a template. Odds are it will not serve your particular situation well.

Here is my suggestion for how to proceed. Sit down with your prospective partner(s) and try to work out broad agreement terms. Not legalese, but things like what your business goals are, how you will treat each other, how you will each be compensated, how payments will be made, etc. This should not be in one sitting. If it is going to be a valuable partnership, you will work with each other for a long time, so you should have several meetings to get to know each other and check each other out. If you get through this and still feel like this is going to work, then write up a one page draft agreement. Take it to your attorney and have him/her draw up a formal agreement. If you work out most of the terms informally yourselves first, you will have a much better chance of making this work and also save a lot on attorney fees.
 
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