How Do You Protect Your Business in a Partnership Agreement?

If you’re entering into a business partnership, it’s an exciting time. A partner can make things a lot easier, and business partnerships allow you to capitalize on each other’s strengths while shoring up each other’s weaknesses. But a business partnership is always a bit risky, and it’s never wise to go into one without the help of a Las Vegas business formation attorney.

Get a Las Vegas Business Formation Attorney

The first and most important thing to do is to get an attorney with experience in the Las Vegas business world and business law. An attorney will be able to protect you from signing anything that’s not in your best interest, make sure that you and the other party fully understand what you’re agreeing to, and even help you investigate potential partners to make sure that the partnership is wise and in your best interests.

Get It In Writing

Everyone trusts their friends, and it’s quite common in small businesses especially for partners to come to an agreement on a handshake. In fact, some people are reluctant to ask for a written partnership agreement because they fear that it will look insulting or as if they don’t trust their partner. But if you really are serious about protecting your business, you must get everything in writing, and a true friend or reliable family member who genuinely wants the best for you will understand this. The partnership agreement should clearly define everyone’s role and what expectations there are for everyone involved. 

Have a Way to End the Partnership

As good as a partnership is, it’s in both your best interests to have a legal and clearly delineated method for exiting the partnership if that becomes necessary. This might not be because someone does anything wrong; it could just be because one partner dies or has to leave the business for other reasons, such as health or family concerns. If you can agree on how to do this and the terms for it in advance, things will go much more smoothly if the moment comes.

Make Sure You’re Safe From Debt

Debt is always something to be feared in a business, and when you sign on a new partner, you need some assurance that they will not be able to saddle your business with more debt than you’re willing to deal with. If they can’t pay their debt, you personally or the business may become liable. Make sure you have it in writing how much debt any one partner can get the business into, and make sure that you have enough capital to cover your current liabilities at the time of signing.

Get Insurance

Never avoid getting insurance because you “can’t afford it.” You absolutely cannot afford to not have insurance. This is an investment that should be a non-negotiable for any business and is absolutely essential when you’re establishing a partnership.To make sure your business is protected in a partnership, contact the Hutchings Law Group in Las Vegas for help in Vegas, Henderson, Summerlin, and the Greater Nevada area.

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