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Tips_on_Writing_a_Good_Parntership_Agreement
| Tips on Writing a Good Parntership Agreement.
When going into business and taking on a partner, it is a good
idea to have a contract/agreement to determine the share of the
company you each own. It also allows you to show and agree on
what each of you will contribute, as well as protecting both of
your interests when working together.
You might be wondering now, how to or what makes a good
contract? Well it is really simple. First thing to do is to be
clear on every aspect of the business. Something’s you may want
to make clear are:
1. How much each of you will invest. - This will show what both
of you are contributing to the company as well as it will help
determine who own what % of the business.
2. When and if payback happens. - Pay back is meaning paying
back the initial investment by a partner. Payment should only
come if the investor will not own any part of the company when
he is paid back in full(plus a little extra for being an
investor). If they are to remain part owner of the company then
they should recoup their losses through the revenue generated by
the business.
3. Who will over see operations of the business. - This is
important so that you are clear on who will deal with the day to
day issues of the company, such as dealing with the clients
ect...
4. Who owns what percentage(%) of the company. - This is a very
important part because when decisions have to be made, there has
to be a clear vision on who has the final say. This is usually
who has the major share in the company, so it is best not to go
50/50 when entering into an agreement, at the most you should go
51/49 at least.
5. Buy out/selling clause.- In case one partner needs to leave
the business there should be an option to buy out or sell their
percentage off. This should be agreed on by both partners.
Another important part of a contract is to have both partners
sign it, along with a witness for each side to sign the
contract. This gives an extra method of protection when the
contract has to be changed or enforced as there are witnesses
that can vouch for each side.
There are many other clauses you can add into a contract to
protect yourselves, just make sure there is an agreement signed
by both sides before you get into business together. It will
save you allot of headaches and protect your interest as well as
your business!
About the author:
Anthony Jewell has over 6 Years experience in the Web & Graphics
World. You can visit my business at http://www.logo2d.com
©Copyright 2005 Logo2D.com : Feel free to use this article
freely but please keep in the copyright
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