The partnership agreement is a step further than the conventional verbal communication process to continue with business transactions. Partnerships in connection with business and behavior also tend to face mutual relations conflicts, such as differences of opinion and misunderstanding ideas. To resolve these problems and ideas that can infest the productive environment of every business, a partnership agreement is designed as a legal contract and signed by the parties concerned. After completion, the parties involved are legally related to each other until the agreement will be formally dissolved.
To follow a fair and smooth partnership agreement, one must follow the checklist the following things needed to be included in the Partnership Agreement:
1) Defining the financial contribution of each partner: Ensure the financial contribution of each partner is clearly stated in the partnership agreement.
2) Defining the Work Division between partners: This is an important task to categorize efforts by each partner and define that who will do what they do and all of which form their respective decision-making teams.
3) Defining property included in partnership: This step defines the intangible properties of partnerships such as land, plots or buildings and other constituents such as customers, infrastructure, design; Basically, all physical and intellectual properties need to be included and clearly defined in the agreement.
4) Defining the use of property by individual partners: These include all the limitations that need to be treated by property dividers which are partners in the agreement. All types of usage limits need to be clearly declared in the agreement.
5) Defining income plans: this step includes taking care of all such things as a percentage of earnings for each partner, etc.
6) Defining strategies to handle taxes, accounting and bank accounts: These include all signing privileges for business accounts, purchases, etc. With respect to all partners.
7) Define a settlement plan for each potential dispute: Turn on your disputes to intermediaries, agreed upon in advance or your business advisory board, is one way to resolve the problem. This choice must be clearly declared in the agreement.
8) Defining an action plan when one pair decides to leave the agreement: a legal statement like having a purchase must be included in the appropriate agreement.
9) define action plans if one partner dies or disabled or defect: If one leg has been lying in bed or die, how will others run a business? Making such decisions, will save the future risk that can cause business fall, due to lack of direct strategic action. Including the right solution such as the purchase agreement in the partnership agreement can complete the goal.
10) Defining the steps to handle business sales: This includes decisions regarding the strategy out of small businesses. In the case, the plan includes selling businesses, all partners need to approve it, as well as on business evaluation and share net income.
Employing the written partnership agreement mode makes it more comfortable and easier for agreement holders to see the potential risks or situations that might arise and create a dispute later. In general, people bring down the need for partnership agreements when the people they face are good friends or in family requirements with them; According to statistics, some of the dissolution of the most horrible and embarrassing partnerships have occurred among friends, who entered the same professional realm.