Whether you are an entrepreneur considering the benefits of working with a partner or you are in the middle of a dispute, it is pivotal to review various factors related to business partnerships. For example, make sure you carefully go over the details of a partnership agreement.
Effective partnership agreements can prevent misunderstanding and reduce the likelihood of a costly dispute. Moreover, if a disagreement surfaces, they play a key role in the outcome of a case. Partnership agreements cover many details and it is important to sign an individualized agreement tailored to your unique needs.
What should you include in a partnership agreement?
According to the New Jersey Business Action Center, verbal agreements can result in confusion after a number of years pass, which is one reason why written agreements are helpful. When drafting a partnership agreement, there are multiple issues to address, such as the agreement’s duration, each partner’s responsibilities and authority, the distribution of profits and salaries.
You should also take into consideration what will happen in the event one partner dies, one sells their interest or a dispute arises.
What happens when a partnership dispute surfaces?
Partnership disputes occur for a host of reasons, whether one party believes that another business partner violated the terms of an agreement or there is a misunderstanding regarding business operations. Sometimes, business owners can resolve these disputes outside of court, while litigation is inevitable in other instances.
If you have found yourself in the middle of a business partnership dispute, make sure you carefully go over the terms of your partnership agreement as well as the details surrounding the case.