One way to start a business, if you’re not interested in running a sole proprietorship by yourself, is to start a partnership. You work with one other individual and you start the business as co-owners.
When doing this, it is important to have a partnership agreement in place. You need to know exactly where each of you stands and you need this legal agreement to define the relationship. So what should go in that agreement?
The division of labor
First and foremost, you want to divide up the jobs that you both need to do and give each other defined roles. One person could be in charge of hiring employees and getting parts and materials, for instance, while the other person is in charge of sales and branding.
Your ownership percentage
Don’t ever assume that ownership is going to be split up 50/50. You need to take the time to establish exactly what percentage each of you owns, along with how much you’ll need to invest for that ownership.
How to dissolve the business or solve disputes
You also need to consider what will happen if you have a dispute in the future. How will you reach a solution? How do you decide something if the two of you can’t compromise? If you need to dissolve the business, what steps will you have to take?
These are just three examples
It’s important to remember that these are just three areas that you need to touch on, but there are far more to consider. Be sure you carefully think through all of your options and the steps to take.