Essential Elements of a Partnership Agreement

Creating a partnership agreement has never been easier with all the online templates available to make this happen.  It is important to put these agreements in writing, as the evidence of a partnership may difficult to prove if one of the partners dies.   The partnership agreement should spell out the relative financial interests of the partners, how income is shared, how much is kept in the capital account, how decisions are made, and considerations involving dissolution of partnership (including how long the partnership agreement is good for and what happens when a partner dies).

I risk being redundant if I rehash all the information that can be found elsewhere on the web.  One consideration that needs to be made in the category of how decisions will be made is that if there is an impasse somewhere in making decisions there can be the use of a couples' therapist instead of an arbitrator to help work out these issues without continual reliance on someone every time an impasse is reached.  I suggest making all decisions unanimous to prevent ongoing resentment about decisions that have been made unilaterally by one of the partners.  This can be written into the agreement along with a stipulation to seek couples counseling in the event of an impasse.  This makes it harder for one of the partners to balk at going to counseling later if they want to back into denial or somehow stall the process of working out differences.

One of the other considerations that can be written into the agreement relates to a fundamental accounting principle that no one person handles a transaction from beginning to end.  For example, if one of the partners collects the money, the other partner deposits it or records it in the books or software of the company.  It may sound 'mickey mouse' to do this, but having checks and balances within even a small business can help prevent temptation from getting the better of someone in the partnership.  

I can help with the couples' counseling end of things, as well as to lend my accounting knowledge to help promote a business situation that's transparent, collaborative, and cooperative.  Partnerships can do the most when both partners have a smooth working relationship that allows them to focus the most on how they can provide their product or service, with the time spent communicating with each other to be the most efficient and effective as possible.  The goal is to make the process of running your business be as smooth and trouble free as possible to accomplish the mission of your company.  Good couples' counseling can be like spending pennies on the dollar compared to the costs of disentangling yourselves from the wreckage of time spent bogged down in endless frustrating interactions that ultimately can sink a business.