A partnership based upon a handshake and a promise may feel more trusting, but it sets a business up for disaster from the get-go. The best advice for anyone considering operating a business as a partnership is to "put it in writing." Oral partnership agreements leave too much up for debate and are ripe for misunderstandings. Having written partnership agreements will protect everyone involved in a partnership and will allow for the focus to be on succeeding as a business, not on misunderstandings between the partners.
Get the documents your business partnership needs and review information on how to form a General Partnership, Limited Partnership (LP), Limited Liability Partnership (LLP) or other form of Partnership. It’s important to make sure you use Partnership Agreements to address any concerns that may arise down the line; who has equity (and how much belongs to each partner), who collects profits, and what happens if one partner leaves the business.
You want to consider any possible events or situations that could lead to the dissolution of your partnership, and lay out ways that you will handle these issues in your Partnership Agreement. If you protect your partnership with the proper legal documents, it will lead to a more clear understanding between you and your business partner, smooth out business operations, and it can help prevent legal disputes down the line.