A business partnership agreement is crucial as it stipulates the arrangements and mandates required from each individual in the agreement. Writing an effective business partnership agreement is essential. A legal document template will guide you on how to write one effectively. Here are some of the ways that you can write a business partnership agreement.
1. Decide On A Name
When writing a business partnership agreement, the name of the partnership is required as the first identifier of the venture. Depending on where your partnership is set up, you may have to search for the availability of the name before registering the name with the state or relevant government entity. Having been issued with the available name, you can place it at the top of your partnership agreement contract and cite the name throughout the document.
2. Write Partnership Mission Statement
A mission statement states the main aim of the business. An effective statement elaborates the ‘what, why, how, where, and when‘ of the enterprise, but in a short and concise manner. The tone of the mission statement should aptly reflect the business partnership and company culture. This could also include the overarching philosophy that governs your business practices, giving consumers a clear picture of what your company does and who it aims to serve.
3. State Your Goals
The partnership agreement should also include the goals of your venture. Are your goals to become more sustainable in fashion, to reach a wide customer base by making your fashion price affordable to the masses, or to provide an exclusive range of clothing to a specified sector? Reflect your long-term goals while keeping your company’s tone consistent.
4. State The Duration of Partnership
In order to avoid preliminary agreements, which often lead to disagreements, you need to state the duration of the partnership. Duration can be in the form of a timeline, a project, or an open-ended agreement, which means you revise your partnership duration as the contract is in effect.
5. Stipulate The Roles
Each individual involved in the partnership should be aware of their roles and the action plan in place to fulfill the goals stipulated. When stipulating goals in a partnership agreement, the individuals in question must fully understand the requirements to avoid conflict or assumed incompetence.
Where an individual doesn’t agree to the stipulated roles, clarification must be reached before signing the partnership agreement contract. The stipulated role descriptions should also include the management levels and hierarchy if relevant. Without these explicitly listed, there may be confusion about the reporting and accountability system.
6. Financial Contribution
For matters of financial contribution within the partnership—each contributing partner should state the amount they’ve pledged to put down. If it’s a matter of one party providing the property for business operation, the rental, utility, and operational costs, as well as the size of the property, should be included. The amount, date, and place of contribution need to be outlined to avoid assumptions, conflicting statements, and confusion.
7. Consult A Lawyer
You can consider consulting a lawyer before you write your partnership agreement. A lawyer is in a position to determine the information you should include in the agreement based on the structure and goal of your partnership. A lawyer is also in a position to offer advice on how you should execute the partnership in a manner that will eliminate the common problems that partnerships experience in the long run.
You can also consider consulting a lawyer to draw up a draft partnership agreement. They can determine whether you included the important information that is required. They can also word and structure the agreement to make it more clear, effective, and agreeable without leaving gray areas that may be left to assumptions.
Should you consider using templates to guide your partnership agreement, you can still consult lawyers to look through it. They may advise you to add more information or tailor certain aspects of the template to fit your partnership dynamics.
The articulation of the partnership agreement is important for clarity. Decide on a name stated on the top of the agreement and mentioned throughout. The partnership’s mission, goals, and duration must be listed for each partner to agree to the venture.
Stipulate the roles and expectations of each partner so that the flow of work and decision-making is apparent. The contributions of each partner should be clear, and you can consider consulting a lawyer to go through your agreement. These tips above should help you draft a clear and effective business partnership agreement.