by Tebello Hlalele
Finding ways to make Partnership Agreements work.
When taking on a business partner, it is critical to have a formal, written partnership agreement. While this is not a legal requirement, it does provide a framework for the partnership in terms of everyones obligations, settling conflicts, disagreements and other issues that could occur.
The agreement is needed for the well-being of the business. Create your written partnership agreement with the assumption that anything that can go wrong with your partnership will.
Friction between partners over things such as money, power or ego frequently undoes business relationship. Your partnership agreement should prepare you for all possible what-if situations and set methods for resolving them.
You can save money by drafting your own version of the key parts of your agreement, then taking it to your firms attorney to be reviewed, clarified, modified and finalized. It is important to have an attorney review the contract.
These are some of the key areas you should include in your written partnership agreement:
1. Partnership Agreement Basics
- Name of partnership/ venture
- Purpose of partnership
- Duration of partnership
- Identify separate roles
- Identify separate responsibilities
- Separate contributions regarding cash, assets and investments
4. Buy-out procedures
- Guidelines to be followed when one partner retires or leaves the partnership
5. Dispute resolution
- Methods used to settle disputes
- Mechanisms to be used if disputes to be resolved
A setup to protect shareholders of a company. Establishes relationship between shareholders and management of a company. It clears out duties and rights of shareholders in a company.
Need of shareholders agreement
- Offers shareholders protection
- Important for basic decision making of a company
- Cuts disputes between directors and shareholders of a company
- Insures clear partnership understanding
- Shareholders are protected from lawsuits
- Shows daily company operations
- Presenting an invention or business idea to a potential partner, investor, or distributor
- Sharing financial, marketing, and other information with a prospective buyer of your business
- Showing a new product or technology to a prospective buyer or licensee
- Receiving services from a company or individual who may have access to some sensitive information in providing those services
- Allowing employees access to confidential and proprietary information of your business during their job
The Key Elements of Non-Disclosure Agreements:
- Identification of the parties
Definition of what is deemed to be confidential
- The scope of the confidentiality obligation by the receiving party
- The exclusions from confidential treatment
- The term of the agreement
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Until next week, bye-bye for now.
Tebello “PandaPreneur” Hlalele
Business Collumnist: FS News Online
Tebello is writing featured articles for FS News Online, weekly. He covers various Business related topics and answer relevant questions.
About the Author: Tebello Hlalele, a 22 year old entrepreneur, student and future leader from Meloding Virginia, currently residing in Bloemfontein. He is currently leading a programme called “Hustle on the move”. He aim is to get entrepreneurs in the Free State to reach their desired destinies. He also has a 30 minutes slot with Ace Moloi on Kovsie FM every Friday that interacts with entrepreneurs regarding their challenges.