What should you cover in a partnership agreement?

On Behalf of | Mar 19, 2021 | Business Formation |

When you’re entering into a business partnership in New York, it’s important to do everything right. One of the best ways to ensure that an alliance starts and remains strong is with a partnership agreement. Here’s a closer look at a few things to include in your partnership agreement.

Determining ownership rights

After finding a business partner, you’ll want to remember that a lot of sharing will take place. For instance, your new partner will share your company’s resources. They’ll also share company revenue with you. To help ensure this partnership goes smoothly, it’s beneficial to use a partnership agreement to state who owns what regarding your business. Having ownership rights clearly stated is also helpful if this partnership comes to an end.

Setting goals

As a business formation and planning attorney will likely tell you, setting goals is important. You should have a section in your partnership agreement that covers goals. This section should cover your own goals, the goals of your partner and any goals everyone shares. It’s also a good idea for this section to mention the revenues shared by business partners for reaching said goals.

Ending a partnership

While it’s not something you want to think about, every partnership will end at some point. A business partnership might end due to disagreements or a business going under. Considering that, it’s imperative to include procedures for how to handle the end of a partnership in your agreement.

Partnership agreements are beneficial ways to make sure a new business relationship goes well. If you need help creating or making changes to a partnership agreement, consider contacting a business law firm for assistance.