Involving friends to join a business is cool. It accelerates the business growth and eases the burden of each other partner as well. However, even though your partner is your close friend, the chance for future dispute can arise in the future if you don’t set up clear boundaries. Therefore, making a partnership agreement template is a must that this could bring a healthy and professional partnership. In the future, you will no longer hold the grudge for seeing your friend cheat or not showing the best performance as you do. Besides, a clear and formal agreement can give you measurable expectation whether it is profit, loss and so on.
What Is A Partnership Agreement?
A partnership agreement is a written contract between partners that rules the terms and condition in doing a business. This will include a certain agreement from both parties which is not only about profit, but also losses as well as the proportion of the work. Therefore, this agreement will include the following aspect:
- Includes the proportion of the ownership and also the terms and conditions of profits and loses.
- Describing the management power and the duties to each party.
- The partnership length and also describing the case of how this cooperation will be terminated.
- Describing how the partner can buy the share of the partner.
In this case, you can ask a help from the attorney so you can make sure every aspect has been included. Besides, this can be used as the explanation of “what if” questions related with the work in the future, so you can avoid unnecessary problem.
Why Is The Partnership Agreement Important?
Even though downloading a template is not necessary, you can gain some benefits from the partnership agreement template. First, you save your time to make the appropriate format with accurate details on it. Second, it looks professional and you can adjust it as you need. You get to make a real business agreement accordingly. To get the template, this page provides you the best format with adjustable content inside.
The Benefits of Making Partnership Agreement
There are some benefits you can get when making the agreement which is specifically for your business goodness.
- To Have A Clear Roles and Responsibilities – Even though both partners might have different capabilities and skills, the agreement will help you set up the proportion of the task and job description, of course with both parties’ agreement. This will rule how you and your partners have a role and the possibilities about the change.
- To Avoid Tax Issues – A partnership profit distribution should be based on the profit after taxes.
- Avoiding liability and legal issues among partners.
- Deal changes – in the future sometimes there will be one or some partners who don’t show the maximum effort that this can lead to certain risk and consequence.
With the general information we provided above, we hope you will have a clearer understanding of the agreement. The partnership agreement template, after all, is a way to avoid any possibilities in the future.