Your business partner is kind of like your spouse. You spend hour after hour, day after day, together. Your dream of a future that includes happiness and wealth.
Then, as often happens in a marriage, it all comes crashing down when times get tough or when one partner outgrows the other.
All relationships have ups and downs, and partnerships are no exception. One business partner might think the other isn’t sharing the load. One might accuse the other of improperly spending company money. Or, one might feel that proper compensation hasn’t been given for intellectual property brought into the business.
What are some things you can do to head off problems before they happen?
- Make sure you are entering business with someone who is reputable. You should do background checks on each other to look for lawsuits, judgments and criminal records. This way, both of you are assured you are entering a quality partnership.
- If you’re entering a partnership with someone who already is in business, make sure you see the books and facilities. Ask employees about the boss and what it’s like to work there.
- Have a meeting to discuss the company’s organization. Will there be a managing partner? How large of a salary will the business partners take? What are the intellectual property rates? What happens if one partner wants to be bought out of the business? How much time and effort will each partner be expected to put in?
These are some good ground rules to start, but that doesn’t mean things won’t go sour. A California attorney who is well-versed in business law can advise you on how to proceed in case of a partnership dispute.