The 2 reasons creating a Partnership Agreement should be your first step when forming a business partnership. First, the protection a Partnership Agreement affords makes skipping this step rather dumb. Second, the process of working out the terms of your Partnership Agreement will reveal potential problems and help you work them out before they happen in the real world.
If you are in a business partnership, call your bank and find out if you have a joint account. If you are “on” the account but it’s not a joint account, change it.
Many people who call me find themselves in the frustrating position of not having any “power” in their failing partnership. There are two options.
You find out your partner used the debit card to take cash from the business without talking to you. It’s your firm position that the partners should not take any money out of the business until the business is profitable. Your partner disagrees.
Two people show up in court fighting over the proceeds from the recent cash sale of their small business. Let’s call them Bob and Alice. There is no Partnership Agreement.