Follow on Google News News By Tag Industry News News By Location Country(s) Industry News
Follow on Google News | ![]() Essex Bookkeepers Talk About the Vital Importance of Partnership AgreementsWhen starting out in business with a friend, colleague or relative, it is easy to think that everything will continue remain as pleasant and smooth running for the long term as it is at the beginning.
The most common reason for a business partnership to fail is a lack of a written partnership agreement. What you may not realise is, when you go into business with one or more other people, even without a formal set-up, your association is likely to still be seen as a partnership in the eyes of the law. The implications of this are significant, in particular if a disagreement arises or one of the partners wants to – or has to – leave. There is always a ‘honeymoon’ Essex bookkeepers Office Assistants (http://www.officeassistants.org) say you should take a step back and consider various scenarios. MD Lynn Watson says, "What if an opportunity came up for you to relocate to another country and it just wouldn’t be viable to continue as a partner? You wish to leave, but there is no clear agreement as to what the business owes you, or what will happen to your shares. And here’s another possibility: "These are just two of many situations that can and do happen in business life. Precisely why it is imperative you set up legally binding, professionally drafted partnership agreements. The best time to do this is when everyone is getting along: so put it at the top of your to-do list." What Should be in a Partnership Agreement? A good partnership agreement will include responsibilities, roles, salaries and other details concerning financial arrangements as well as exit strategies. The agreement should set out how the partnership would be dissolved in the event of one or more of the partners deciding they wish to leave, and what would happen should someone be forced to back out, or pass away. Of course these are difficult subjects to broach, but a frank discussion at the outset will help to avoid any upsetting and undesirable situations in the future. Limited Liability Partnerships: If you are setting up as a limited liability partnership (LLP) and assume this means everything is taken care of, you should be aware that without a written partnership agreement in place, should something go wrong the Limited Liability Act 2000 (LLPA) will apply. Some of the provisions of this Act may not be considered fair, such as the ability to expel a member against their wishes. Office Assistants say that if you are setting up a new business partnership, you should talk to your bookkeepers in the first instance about your financial position and the best way to formally set up your new business. Then take legal advice from recommended lawyers who specialise in partnership agreements. "It’s the wisest move you’ll make in your new venture", they say. Office Assistants offers bookkeeping services and much more to clients throughout the south east of England from their base in Rainham, Essex. For more information visit http://www.officeassistants.org. End
|
|