Commencing a partnership is an exciting venture for any entrepreneur. Doing so ensures a further expansion of your business and alleviates some of your work load if it has grown too large. To ensure that you and your new partner's assets are protected, it may be necessary to change the type of partnership if you were a sole proprietor previously.
Write out the names of all business partners and specify the type of partnership. For example, "John Doe and Jerry Done hereby form a Limited Liability Company for the purposes of obtaining profit."
Draft a section in the document specifying the partnership's total assets at the time of creation. This is essential for limited liability partnerships and corporations as this is the maximum amount a party may collect in court in most cases.
Specify the roles of each partner. If certain partners will not be participating in the actual daily business, they are what is known as a "silent partner" and should be added as such. This protects them from liability placed on the active partners.
Have the contract signed, notarized and filed with the jurisdiction's business office.
- "Contracts Examples and Explanations"; Brian A. Blum; 2007.
Silent Partnership Agreement
Running your own business can mean a lot of unpaid hours and dipping into your savings. Perhaps, your company generates enough income,...