Forming a partnership, be it limited or general, with another party can do a great deal to expand your business opportunities. But you need to examine every aspect of a potential partnership extremely carefully. And when it comes to formalizing your partnership, you want to create a contract that clearly states each party’s responsibilities and obligations.
But what can you do to better ensure that the partnership you are considering will offer the benefits you are looking for? Well, first and foremost, you want to take all the time you need to fully assess the other party’s commitment to the partnership. To this end, you need to sit down with the other party and craft a business plan that helps clarify your common goals and expectations. Creating a business plan is also a good way of determining if your potential partner is a good fit. If you discover that the other party has a different set of goals or conducts business in a manner that is contrary to your style, it may be best to forgo the partnership.
You also need to assess what type of partnership will best serve your needs. Based on your negotiations with the other party, you may come to realize that a limited partnership, rather than a general partnership is your best option. In a limited partnership, the general partner bears no responsibility for the acts of the limited partner. The choice of this arrangement could be based on such things as financial factors or time commitments.
And before you sign a partnership agreement, you want to make sure that you and the other party fully understand your legal commitments. Therefore, it is a good idea to have an experienced business law attorney involved in your negotiations from the outset. An attorney can help guide you through the contract negotiation process to make sure that your agreement is concise, clear and contains all of the elements necessary to prevent misunderstandings or disputes.