|
|
 |
|
Smart Business
 A business partnership needs
a written agreement
Say you're planning to start a business or expand an existing
one. You don't want to go it alone, but you're not sure how to choose a business partner. A friend might seem like an ideal
choice for partner, since you probably have similar personalities and interests. But the qualities that make for a good friendship
don't always translate into a successful business partnership.
|
|
Balance. A business partner should balance
your skills and strengths. For example, if you're good with finances, your partner should be good at marketing. If you like
to tackle ten different projects at once, a more methodical partner might be a good balance. |
|
|
|
|
|
Communication. A good partner should be willing to communicate
freely and often. Friends often assume that they think alike, so they never get around to discussing important business issues.
For example, if your prospective partner plans to retire before you do, what will happen to the business? What if you want
to build a large company, but your partner wants to keep things small? Hammer out important issues like these before you get
started, and document your understanding in a partnership agreement. |
|
|
|
|
|
The partnership agreement. The need for a partnership
agreement can be summed up in two words: things change. You and your partner/s may agree about everything now, but disputes
could arise later on. Or one of you could die unexpectedly, leaving the survivor/s to deal with the deceased partner's heirs.
What should a partnership agreement contain? Basic provisions
include the parties to the agreement, the name, purpose, and location of the business, and the division of management responsibilities.
The agreement should also indicate what initial capital contributions (or services instead of capital) will be made, when
additional capital contributions will be required, and how profits and losses will be shared.
Beyond the basics, a partnership agreement should anticipate
major business changes and spell out how to deal with them. For example, if one partner dies, what are the rights and obligations
of the other partner/s? Under what circumstances can a partner leave, retire, or be expelled? What are the financial arrangements
for departing partners? How long must an ex-partner wait before starting a competing business?
A partnership agreement can't address every possible contingency,
so consider an arbitration clause to handle disputes that you and your partner/s can't resolve on your own. Without such a
clause, your only alternative could be costly litigation. |
Your business will run more smoothly with a carefully thought-out,
written partnership agreement. See us and your attorney for assistance in getting it done right. © copyright 2005 |
| |
|
 |
|
|
|
|
|
Huddleston Tax CPAs/Accountants of Seattle & Bellevue
(800) 376-1785
40 Lake Bellevue, Suite 100, Bellevue, WA 98005
Need
a CPA/Tax Accountant? Need tax preparation, a bookkeeper, payroll services, quickbooks training, business valuation,
consulting or other quickbooks services? Huddleston Tax Accountants serve the communities of Seattle, Bellevue, Tacoma,
Kirkland, Renton, Lynnwood, Mountlake Terrace, Bothell, Shoreline, Mill Creek, Woodinville, Redmond,
Mercer Island, Kent, Tukwila, Sea-Tac, West Seattle, Auburn, Federal Way, Burien, Everett, Marysville, Snohomish,
Lake Stevens, Mukilteo & Kenmore, Washington. Call us to arrange an appointment. For your convenience,
we can meet you at your home, business, or one of our meeting locations. Call to meet John Huddleston, J.D., LL.M.,CPA,
Tawni Berg, CPA, Jennifer Zhou, CPA or Jessica Chisholm, CPA. Member WSCPA.
|
|
|
|
