Entrepreneurship is exciting, hard work, and very rewarding for those willing to put the time and commitment into it. Here are three ways that you can avoid your enterprise from being in the middle of a partnership dispute that will negatively impact your company.
Formalize an operating agreement at the very start
It can be tempting to begin work on a new business opportunity once you have found one or more potential partners that share your vision and want to be involved in the new enterprise. Before too much work gets started, however, be sure to sit down and hammer out a formal written agreement. Failing to do so could end up with time and money lost to a venture that does not come to fruition.
Do not give family members equal partnerships
It is common for an established business owner to feel that giving their children in the family business equal shares to continue the legacy is fair. According to a business article in Forbes, that is precisely what you should not do. For example, one partner may want not to take risks and continue to enjoy a steady income from the company, while the other partner wants to take risks to expand and potentially raise returns. Or, the business arrangement works fine, until a change in values or goals makes itself apparent after the death of the business founder. When each sibling has an equal share, such differences can threaten to put the company in a deadlock.
Use the services of a business attorney
Even if you and your business partner want to save money by incorporating your business or finalizing a transaction yourself, you should never leave things to chance. By consulting with an experienced business attorney, you can be sure that everything is done correctly and protects your rights.