Milan Vrekic, TitanFile Inc., @truejebus, Halifax, NS, CYBF Entrepreneur
In many ways, a partnership agreement in business is like marriage. You need to know the other person very well, trust each other, be willing to share responsibilities and plan for the future. You also need to accept that if things in the partnership do not work out, a “divorce” will be a lengthy and expensive process.
In a partnership situation, it’s critical to clearly define expectations and compensation from Day One. A common issue in partnerships is one person misinterpreting the amount of work required to run a successful business and not being able or willing to take on their share of the work. Partnership agreements should contain a clear “out” clause that all partners agree with. It should define what happens to the company and the assets if one party leaves or does not perform the duties his or her duties.
You can find some high quality partnership agreement templates online for low or no cost. These are a good tool to start with in the early stages of your business. Be sure to include as many details as possible in your partnership agreement – putting the effort into creating a comprehensive agreement now could be hugely valuable in the long run. As soon as you have money available to pay for legal advice, be sure to have a lawyer review your agreement.