The Boss of You

AKA: Why you need a partnership agreement.

I mentioned in my post earlier this week about business partnerships that I’d address the issue of partnership agreements here, so here we go. We go into this in detail in the book, but really it’s quite simple: you need a partnership agreement. I don’t care if your business is with your mother, your sister or (perhaps especially) your one true love, you must have a partnership agreement. In a worst case scenario, a partnership agreement is what will help to make that worst case scenario a little less hellish. In a best case scenario of an amicable business break-up — maybe your business partner has an opportunity to move to a tropical paradise and wants to end her role in the business — it will still help make sure that the splitting up of assets (or debts) is fair and square and follows the rosy picture of life you had in the early days. Is it worth having a lawyer look over your partnership agreement? Definitely yes. Is it absolutely necessary? Well, I’m no lawyer, but I’m inclined to say probably. Can you get away with doing that until you’ve at least made enough money to pay the lawyer? Sure. Just make sure you have something basic in writing and witnessed, and make sure it doesn’t get put to the bottom of the list when you do get the cash in to make that legal trip.