How to Become Business Partners

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You may have a successful practice in any profession. Perhaps you have a profitable law practice, medical practice, coaching enterprise, tutoring service or other venture. Yet, you may wish to expand your business further. If you have an influx of clients that you simply cannot cater to on your own, you might consider entering into a partnership. You can form a partnership with ease by following a few guidelines that slightly vary based upon jurisdiction.

Find a partner. Choosing a partner represents one of the most vital decisions in business. You want to get along, have similar goals and generally work well together. As such, you should never jump into a partnership blindly. Have a series of meetings over a period of time in order to get to know your prospective partner. Try to make the meetings both formal and informal in nature. For example, you may want to meet with the person both at your office and for a few drinks. This way, you can gain a fuller sense of the person’s personal and professional demeanor.

Lay out the groundwork. Decide key factors to your partnership. These include compensation, profit sharing, investment sharing, asset allocation, expense splitting, office location and other important business decisions. The more concrete of a plan you lay out, the less problems you will have later. Get everything down in writing. You may wish to have an attorney review your contract terms to anticipate any problems down the line. Every partnership starts with good intentions; however, some end up having serious issues that require litigation. The contract will be useful to you down the line.

Make it official. File papers of organization with the business entity in your state. Form either a Limited Liability Company, Limited Liability Partnership, Corporation or General Partnership. Based upon your official legal structure, you will have to file various forms with your state. You may wish to hire an attorney to assist you with this as well.

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