When starting a partnership in Texas or any other state, it is generally a good idea to craft a written partnership agreement. This can make it easier to resolve disputes or develop protocols that will be followed if you or your business partner choose to leave the company. Let’s take a look at what should be included in such a document.
Specify the types of contributions that each partner is making
Typically, you will either make a financial contribution to the company or contribute what is referred to as sweat equity. If you provide sweat equity, you are going to take steps to increase the value of the business, such as marketing a product or providing services to your company’s clients. In some cases, you will provide both money and sweat equity to the business.
There should be an inventory of assets each person has contributed
Assets can include anything from office furniture to a list of clients that will buy products or services from the company. In addition, intellectual property should be included in such an inventory. If your company does have intellectual property, such as a logo, slogan or idea for a product, be sure to note who owns it or has the right to use it. This could be important if the partnership is dissolved or sold to another person or entity.
Have an exit strategy in mind
There is a chance that you or your partner wants to grow the company so that it can eventually be sold. Ideally, you will be able to agree with your partner on how to value the business as well as how proceeds from the sale will be split after the sale is finalized.
If you are planning on starting a company, it may be a good idea to speak with a business law attorney. This is generally true whether you want to form a sole proprietorship, a partnership or any other type of business structure.