I just began a business with a friend as an LLC partnership. I know he’s honest and a hard worker, but I’m still a little scared that everything will fall apart and we’ll walk away mad at each other. We used a CPA to get a tax ID number and help us set up the company. Do you think we should pay a lawyer to help us map out the partnership agreement in writing?
Drawing up a written partnership agreement may be the only shot you’d have at walking away from this venture with your friendship still intact. But I don’t think you need to hand some lawyer a bunch of money to make it happen.
Chances are, your new business doesn’t need that level of detail. All you need is someone to help you draw up a template that answers all the “what if” questions. This template can be as simple as a list of all the things that could go wrong and the answers to those scenarios. These would be things like death, disability, moral failure, bankruptcy, etc., and what happens if any of these occur.
You know, there are hardly ever problems in a business venture when everyone’s happy and making piles of money. But it can get rough if you begin to disagree over the direction the company is taking. Or, what if personal issues make you decide you don’t want to be in business with the other person anymore?
It’s easy to go all pie-in-the-sky over these things, but you have to make plans for any and all of the worst outcomes, too.
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