What makes a strong partnership agreement?

On Behalf of | Jun 11, 2022 | Business Litigation |

Business partners typically work together to create a business and oversee its operations. Most small businesses in Louisiana are unique in how they run and the services they offer, and partnerships reflect the unique nature of the specific company. Regardless of how well two partners get along and what they each do in the daily operations of the business, it is important to have a strong and thoughtful partnership agreement in place. 

Important terms to include 

A partnership agreement is a contract that outlines the rights, responsibilities and expectations for each business partner. Depending on the nature of the individual business, partnership agreements should include terms that pertain to some or all of the following: 

  • Division of profit and loss – How the two partners will divide both of these 
  • Percentage of ownership – Partners do not have to have equal ownership in the company 
  • Withdrawal or death – These are terms that outline how one partner could leave the business relationship or what would happen after death 
  • Length of partnership – These terms can identify how long the contract is enforceable and how long the partnership should last 

Partnership agreements can be unique to the individual business relationship and the specific goals of each business partner. 

 A solid foundation 

A thoughtfully crafted partnership agreement can lay the foundation for a strong future for a Louisiana business. When creating these agreements, it may be beneficial to seek the guidance of an experienced attorney regarding the best way to craft an enforceable yet reasonable agreement. A careful look at the individual situation can reveal how business partners can protect their interests.