Setting up in business with others can be daunting and risky, particularly where the individuals all have different ideas and demands on the business. Setting things out clearly at the outset can safeguard the business and create an environment for growth, reducing any risk of misunderstandings turning into disputes, which are often the single cause of a breakdown in partnerships.
At its heart is the Partnership Act 1890 which simply states that, in the absence of an agreement to the contrary, all partners are treated equally with equal rights and obligations. This may work in the simplest of partnerships but even then, it is recommended that a written partnership agreement be entered into, not only to evidence the existence of a partnership but also to provide a reference point for the partners.
In larger partnerships or where the parties are not to have equal rights and obligations, or where duties are to be shared between some partners and not others, it is essential that a partnership agreement be entered into, documenting what is agreed between the parties on all of these things. Getting things right at the outset can often save the partnership from collapse and avoid expensive litigation in the event of a dispute arising.
HUSANES LLP can advise and assist in drawing up a written partnership agreement to safeguard the partnership and its business.