Oscar has been looking into starting a computer consulting business. He’s realized, though, that he lacks the financial resources he needs to turn his dreams into reality. He believes that the only way his business will become a reality is if he finds a partner.
Finding a suitable business partner is not always easy. Oscar wants a partner whose professional skills complement but don’t overlap his own. That’s why it’s important that he spends the time getting to know the person well and to feel comfortable expressing his ideas and expectations before entering into a written partnership agreement.
Once he finds someone he wants to work with, Oscar and his prospective partner can discuss the specifics of their financial arrangement. Key issues to determine include how much each will invest, who will own what percentage of the business, and how and when each of them will be paid. If Oscar prefers an equal ownership arrangement but doesn’t have enough funds to contribute initially, he may be able to negotiate terms that will adjust his ownership percentage in exchange for providing services to the partnership.
The partnership agreement should also include exit clauses. It will be important to address what will happen if one partner wants to leave the business or if both partners want to get out.
Choosing the right partner is critical. Taking the time to work out the details of a partnership arrangement in advance can help promote a successful business relationship.
Client Profile is based on a hypothetical situation. The solutions we discuss may or may not be appropriate for you.
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