Partnerships and joint ventures are often loosely defined
Partnership and joint ventures are two other ways for separate people or businesses to create a new business, particularly when they enter into temporary or informal arrangements, or want to save on costs.
However, without proper ground-rules in place, it can be difficult for parties to have the correct structure in place to properly run the new business, especially as a business expands and personal circumstances change. Most people underestimate the potential for disputes with their business partners over the course of running a business.
Unforeseen circumstances can derail the business
Common issues which come up during a business’ lifetime include:
- Disagreements on decision making;
- Disagreements on exact roles, funding requirements and what constitutes underperformance;
- Bringing in new partners, or existing partners retiring; and
- Dissolving the partnership and what happens to assets (such as IP) afterwards.
Such disputes between business partners can cause the business to grind to a halt and erode any profits or chance of future growth.
Formalise your terms with a tailored agreement
Having a clear and tailored agreement is therefore pivotal to solidify the terms of the partnership and set rules in place early. It will determine many issues such as how you make decisions, how disputes are resolved, what processes are available if a partner wants to exit the business, and how the business is closed. At the very least, it will ensure you have a good exit strategy in case the business or the relationship fails.
Having these clear rules put in place beforehand ensures everyone is on the same page, and accordingly minimises the chance of disputes occurring or business partners falling out. Our lawyers can draft and review agreements that align effectively with the terms you and your partners agree to.
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Partnerships and joint ventures
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- Initial drafting and review + one round of amendments
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