Establishing a partnership is a viable option to grow your business. Aside from bringing in another party to contribute, it can also introduce valuable resources and expertise that can be beneficial over time. Still, these arrangements are not immune to conflicts, making disputes likely to happen.
Fortunately, there are various ways to address disputes, beginning with how you draft the partnership agreement. This contract can be more than just a piece of paper if it includes crucial information and terms that can help prevent or resolve disputes. Your partnership agreement can serve your business effectively against possible conflicts by ensuring it has the following details:
- Clear and concise regulations, including each party’s obligations
- Exact information regarding finances, including ways to approach various scenarios that involve accounting
- Each party’s role and what duties they have in daily business operations
- Procedures and process flows implemented strictly for making decisions and resolving disputes
Ideally, the involved parties can agree regarding these terms with little trouble. However, there are times when the agreement requires multiple stages of negotiations before finalizing the contract. Sometimes, it takes a long time to formalize a partnership because of how thorough the agreement must be, considering the business’s unique characteristics and needs.
Preparing for an effective partnership
There is no foolproof way to success when starting a business partnership. You and your partners can protect each other and the business by preparing adequately before drafting the agreement. Doing so can help detect any issues that can become a source of conflict in the future, allowing you to address them by including relevant conditions in the contract. Additionally, you can involve experienced attorneys when drafting the agreement to place legal safeguards, securing you and your partners’ stake in the business.