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Legal tips for business partnerships


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Every successful business partnership starts with a good idea. In some instances, it’s one person’s idea, and one or more others are brought in to make the idea a reality. In other cases, the idea is shared along with the work of running the actual business. Whatever the dynamics of your business partnership, it’s important to remember that things always run smoothly until they don’t. So even if everything is going great and you can’t imagine anything going wrong, it’s important to plan for what could happen.


*When a partnership falls apart?*


As mentioned earlier, business partnerships come in all shapes and sizes. Some might be 50/50, others 75/25. Whatever the particulars, it’s important that they are spelled out in a way that is legally binding even if you feel you can trust your partner to be honest and deal fairly. Consider the true story of a business owner who had an unwritten 75/25 agreement with his business partner. Everything was great until the 25% partner suffered a stroke and became incapacitated. While the two business partners had a verbal understanding of the partnership, the wife of the 25% partner did not. 150,000 dollars in legal fees later, the 75% partner decided to settle the case by giving a portion of the 75% to his partner’s wife.


Also consider the case of two medical doctors who shared a medical practice 50/50. When one became addicted to prescription drugs, the other wanted to dissolve the partnership and cut his losses. Unfortunately their agreement required that both choose to dissolve the business. Because his partner was enjoying the benefits of the successful medical practice, he did not want to dissolve the partnership and they ultimately ended up in court


*Pay attorney fees now and not later*


When business partners are just starting out on a business venture, money is often tight. One aspect that is often overlooked is attorney fees. Partners hoping to save a little money set out with the hopes that things will just work out. A safer way to do things when going into business along with a partner is to factor in attorney fees when thinking about startup costs. Later on, if your partner, dies, becomes incapacitated, or has a business dispute with you, you’ll already have the percentages of ownership and other considerations taken care of. Remember it costs less to do it now than to fight in court later.


Business, real estate, and bankruptcy law and litigation news brought to you by http://mbblegal.net/

Source: http://www.huffingtonpost.com/a-jude-avelino/in-business-with-your-par_b_3691684.html

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