Whether you work in the oil and gas industry or another industry entirely, you may decide that you want to start a business partnership. Rather than launching the company on your own, you’re going to partner with someone else so that this is a joint venture. You do have to share the earnings, but you also get to share the risk.
It’s important to take the proper steps when doing this, and that includes creating an officially binding contract known as a partnership agreement. What should go in this agreement?
Your ownership percentage
Do you own 51% of the company or just 50? It’s quite important for this to be clearly defined because it can impact your decision-making ability and the value of the company if you sell it.
Your earnings and financial contributions
How much money are you going to invest in the company to get it off the ground? Are you going to take a salary? What do you do with other revenue that the company earns, such as investing it back into the business?
Dispute resolution tactics
Even if your partnership goes relatively smoothly, you may find yourself in a dispute. It can be very helpful to have resolution strategies in place first so that you can get through the dispute without harming the company.
Exit strategies
Finally, remember that no partnership lasts forever. At some point, either you or your business partner may want to exit the company. It can be helpful to have a plan in place, whether you are transferring ownership, selling the company, bringing on other partners or something else of this nature.
With such a major investment on the line, you don’t want to make any legal mistakes. Be sure you know exactly what steps to take at this time.