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3 things to consider before taking on a business partnership

On Behalf of | Feb 11, 2023 | BUSINESS & COMMERCIAL LAW - Business & Commercial Law

Whether you’re just starting out, or have been in business for years, taking on a partner can be a tempting option. Having someone to share the financial and mental burden of running a business with can be very useful, but it won’t be plain sailing.

What will you have to give up to get them onboard?

You are certainly going to have to give up some autonomy and profit, which are two of the main reasons people set up their own business in the first place.

You may also need to sacrifice things like the flexibility to take a day off whenever you feel like it, because once you take on a partner, you will be accountable to someone aside from yourself. If they are workaholics, they may soon get upset if you are more into working to live than living to work.

Can you get what they will give with less commitment? 

Maybe your potential partner is a fantastic graphic artist and you need those skills to design and promote your products. Perhaps you could hire them on a contract basis, or hire someone else of equal ability. Or, if you are artistically inclined yourself, taking evening classes might bring you up to the level you require.

What will happen when you don’t agree?

A 50:50 split of shares will be problematic. If you can keep a higher amount, it gives you the final say when the decision is split. You should also look at how you handle more complex disputes, and what happens if the only option is to split apart.

Considering such things now allows you to get legal help to draw up a partnership agreement that will protect you if things do not go to plan.