When you start a business with someone else, it’s always a good idea to lay down some rules on important issues, such as; how you will run the company, your respective responsibilities and what happens if someone wants to leave the business. Agreeing on how you will handle these, and other important matters, will save a lot of anguish down the line.
If you are going into business with other individuals working under a partnership structure, you should do this with a Partnership Agreement. If you are setting up a limited company, you will a need to record these in a Shareholder’s Agreement.
This guide explains what a Shareholder’s Agreement does, who should get one and what should be included in the document.
If two or more people wish to go into business together, and don’t want to set up a limited company, a partnership offers a simple way to get started. It is similar in many ways to going the sole trader route for an individual.
Business is all about partnerships – public-private partnerships, supplier relationships, collaboration with colleagues and competitors, and of course the way you work with your customers.
So it’s never a good thing when you find your closest partnership – that with the fellow leaders of your business – has begun to break down.
It’s the same old story – you start out bright-eyed and bushy-tailed, full of optimism, but even if your business is successful, the cracks can start to show when you try to decide where to go next.
Without a partnership agreement in place, it’s hard to tell who’s actually got the decision-making power, and companies can collapse in a matter of minutes when it all comes to a head.