| Although there are some variations, there are | | | | but can also help protect them in the event of |
| three basic business ownership structures: | | | | some positive outcome as well! |
| 1. Sole proprietorship | | | | For a modern partnership to not only function |
| 2. Partnership | | | | well, but for each partner to fully understand the |
| 3. An incorporated entity | | | | extent of the role, responsibility, and expectations |
| In the history of America, there has been a "let's | | | | of compensation relevant to him or her, it is |
| shake on it" attitude where each person's word | | | | critical that specific terms be stated clearly and, |
| was his or her bond, and the handshake was the | | | | very important, legally, at the outset of the |
| binding action which made it official. Many people | | | | partnership. Such an agreement should outline |
| here and abroad have begun businesses with or | | | | quite openly and specifically such issues as |
| without partners, or acquired them at a later date. | | | | ownership, capitalization, and operation. |
| Again, many have cemented their partnership, at | | | | While there have been partnerships in various |
| least in their own minds, by some simple | | | | forms throughout the history of mankind, there |
| agreement...perhaps more complete and more | | | | have been many which resulted in name-calling, |
| official than a handshake, but, in many cases, not | | | | lawsuits, and even murder when events thrust |
| legally sufficient for later events. | | | | the partners into an area they never expected to |
| Many things can happen to any business, not all of | | | | enter. |
| those "later events" are good. When the "not | | | | A business partnership agreement does not |
| good" things happen, all partners are at risk. If | | | | provide the legal protections in many area which |
| there is not a good business partnership | | | | business incorporation does, but it can create a |
| agreement in place, some may be at more risk | | | | legal document which helps provide at least some |
| than others. The purpose of such a document is | | | | of the protections that incorporating does while |
| not only to help protect the partners, but to help | | | | the business is still at a stage where actually |
| the business grow to the benefit of all concerned. | | | | incorporating the business is not in the immediate |
| One of the benefits to the partnership is generally | | | | future of the venture. |
| that each partner brings something of value to | | | | Keep in mind that while a properly designed |
| the business...often, something which, when | | | | business partnership agreement can provide |
| combined with the contributions of the other | | | | various protections to the partners, the rules of |
| partner or partners, is what makes the business | | | | the particular legal jurisdiction in which it is located. |
| more than it ever would have been without it. | | | | For this reason, as well as the potential |
| That something of value might be money, | | | | complexities of the agreement, it is |
| connections, a skill, or some other tangible or | | | | recommended that prospective partners contact |
| intangible asset which increases the overall | | | | an accountant or lawyer who is knowledgeable |
| productiveness and value of the business...at least | | | | and experienced in this area. |
| in theory. | | | | In order to save the expenses of hiring such |
| Again, there is no guarantee that things will work | | | | professionals, many people turn to do-it-yourself |
| out exactly as the partners envisaged. They may | | | | legal forms kits. While it is possible for intelligent |
| be worse...or...they could be better. Much worse or | | | | people with a clear vision of what they hope to |
| much better, in fact. | | | | achieve to create a viable business partnership |
| A properly executed agreement between or | | | | agreement, as with so many things, it may be |
| among partners can not only help protect the | | | | less costly in the long run just to hire a |
| partners in the event of a negative experience, | | | | professional to prepare the documents. |