Starting a business in Texas can be an exciting endeavor. Perhaps you have had your idea for as long as you can remember, and now that the time has come to bring your business dreams into reality, you likely cannot wait to get started. Additionally, your future business partner or partners may also share in your enthusiasm and feel ready to get the ball rolling on your future success.
Though you and your partners may have known each other for years — or perhaps even since childhood — you may not want to move forward with creating a business partnership simply on the basis of friendship. Some form of legal understanding needs to exist in order for each person to know what to expect from the partnership as well as to keep each party accountable. Therefore, you may wish to consider creating a partnership agreement.
A partnership agreement acts as a legal contract, which means that any partner who breaches its terms can be held liable. You may think that you do not need this type of contract because you trust your partners and feel confident in their abilities and attitudes. However, personalities, relationships and numerous other factors can change over time. Therefore, it may prove wise to safeguard your company through legal means rather than risk having a friendship falling out resulting in business damages.
Terms of the agreement
This type of contract can also prove useful in that it gives you the ability and opportunity to ensure that everyone remains on the same page when it comes to business duties and responsibilities along with other important aspects of running the company. Some of the terms you may wish to include could relate to the following:
- Each partner’s obligations and duties to the company
- How to address any partnership disputes
- Exit procedures for ending the partnership
- Entrance procedures for bringing in new partners
- Legal and financial liability of each partner
These areas represent only a few that an agreement could address, and the particular details of your company and business relationships may impact what terms you include in your contract.
Creating your agreement
Because a partnership agreement is a legal contract, you will certainly want to ensure that the document is legally enforceable and the terms cover your needs as well as the interests of the company. Therefore, you may wish to find out more information on the necessary legal channels you may need to take in order to properly create your agreement.