When going into
business and taking on a partner, it is a good idea
to have a contract/agreement to determine the share
of the company you each own. It also allows you to show
and agree on what each of you will contribute, as well
as protecting both of your interests when working together.
You might be wondering now, how to or what makes a good
contract? Well it is really simple. First thing to do
is to be clear on every aspect of the business. Something
s you may want to make clear are:
1. How much each of you will invest. - This will show
what both of you are contributing to the company as
well as it will help determine who own what % of the
business.
2. When and if payback happens. - Pay back is meaning
paying back the initial investment by a partner. Payment
should only come if the investor will not own any part
of the company when he is paid back in full (plus a
little extra for being an investor). If they are to
remain part owner of the company then they should recoup
their losses through the revenue generated by the business.
3. Who will over see operations of the business. - This
is important so that you are clear on who will deal
with the day to day issues of the company, such as dealing
with the clients etc.
4. Who owns what percentage(%) of the company. - This
is a very important part because when decisions have
to be made, there has to be a clear vision on who has
the final say. This is usually who has the major share
in the company, so it is best not to go 50/50 when entering
into an agreement, at the most you should go 51/49 at
least.
5. Buy out/selling clause.- In case one partner needs
to leave the business there should be an option to buy
out or sell their percentage off. This should be agreed
on by both partners.
Another important part of a contract is to have both
partners sign it, along with a witness for each side
to sign the contract. This gives an extra method of
protection when the contract has to be changed or enforced
as there are witnesses that can vouch for each side.
There are many other clauses you can add into a contract
to protect yourselves, just make sure there is an agreement
signed by both sides before you get into business together.
It will save you allot of headaches and protect your
interest as well as your business!
Anthony
Jewell has over 6 Years experience in the Web &
Graphics World. You can visit my business at http://www.logo2d.com/ |
