Entering into an Oregon business partnership requires you to have a certain level of trust. However, partnerships turn sour for all types of reasons. So, it may serve you well to have a solid partnership agreement in place even if you have the utmost trust in your partner or partners.
Per SmallBusiness.Chron.com, a carefully worded partnership agreement may help you avoid a lengthy and potentially costly legal battle if a partnership dispute arises. What are some of the elements you may want to address and include in your partnership agreement?
The duties and responsibilities of everyone involved
Be as thorough as possible when drafting a partnership agreement and outlining the responsibilities each party has. Discuss who handles managing the business, funding the business, upholding compliance requirements for the business, etc.
The financial elements of the partnership
You should also address who has a claim to what when it comes to your business. Outline each partner’s stake in the company, including how much he or she contributes and how much entitlement each party has to profits.
What happens if one partner departs
You may also find it useful to address what happens if one partner leaves the partnership. Sometimes called a buy-sell agreement, this section might cover how much a partner should receive from the business upon ending the partnership. You may also want to cover what happens if one partner dies or becomes incapacitated while the partnership is ongoing.
While these are some key elements to address in your partnership agreement, this is not an exhaustive list of all sections you may want to include.