Business partners, especially when starting a new small business together, often have trouble imagining that they’ll get involved in serious disputes. They lose sight of it because of their excitement, because they look forward to working together and for a host of other reasons. This is often when they skip over steps like creating a partnership agreement.
What you have to remember, though, is that disputes are inevitable. They happen to the best and worst business partners. They’re simply a part of running the company.
For instance, maybe you are the day-to-day operations manager. You make sure things go smoothly. Your partner works with investors and manages the money. What happens when they start to spend money in a way you don’t approve of?
Maybe you worry that they’re stealing. Maybe you think they’re wasting money. Maybe you don’t think they’re spending enough. No matter what it looks like, it puts some stress on the relationship, and you need to know how to move forward.
This is when having an official partnership agreement in place can help. It can tell you who has what responsibilities — do you actually have a say in how the money is used? It can set up dispute resolution tactics. It can tell you about your rights and obligations. Think of it as a blueprint for everything you need to know when things do not go exactly how you planned or how you hoped.
As you can see, it’s very important to be realistic and to plan in advance. Make sure you know exactly what legal steps to take.