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Setting up a business in partnership with another person or in a group can appear like a great idea which can also save a lot of hassle. If you were setting up a limited company for example you would need to pay fee and deal with complex administration which is not the case when setting up a business partnership. However, things are rarely so easy and whilst you may have a strong friendship or working relationship with you partner/s at when you set the business up, this could all change.

No regrets

It is crucial to protect your business interest s and you do not want to cut any corners (by not setting a business partnership agreement from the outset for example) because you may regret this later. The story often goes something like this: you started trading and everything was going well until some difficult decisions needed to be made. You and your partners had different ideas on how to go about things and the time spent debating what to do resulted in a missed opportunity. This created tension and arguments and it quickly became apparent that some people were not pulling their weight. All of sudden it appeared grossly unfair that profits were shared equally between partners.

Why a business partnership agreement is worthwhile

Quite simply, you can save yourself a lot of stress and hassle by instructing an experienced business solicitor to draft a business partnership agreement from the very start. This will not only help you at the beginning but will ensure that your interests are safeguarded for the lifetime of the partnership. With such a partnership in place everyone will understand their roles and position within the company. You will end up with an agreement perfectly suited to the needs of your business.

A good partnership agreement will cover everything listed below:

• Exactly who is involved in the partnership and what their roles, rights and responsibilities are

• What he business partnership will be named and where the premised will be

• A glossary of terms so that the agreement can be easily understood

• How the decision making procedure works

• Financial contributions: how will assets and liabilities be distributed between partners? Who will deal with the insurance, banking and accounts for example?

• What happens should someone retire, die or be forced to leave the partnership? Gan a partner or outgoing partner be bought of their share

The business partnership may well grow very quickly to start with which can lead the asset/liability state of affairs to change very unpredictably. By having a partnership agreement set up early on, you can ensure that everyone is focused on the job in hand rather than the state of the finances.

Reach specialist business solicitors in Salisbury on 01722 422300

The business law team here at Bonallack & Bishop are have local knowledge as well as vast experience of commercial law issues which will help  them to quickly get to grips with needs of your business.

  • So for expert advice on partnership agreements, call us now on Salisbury [01722] 422300, or
  • Complete the contact form below.

    Businesses set to suffer as small claims limit increases to £10,000

    As a result of the Jackson Reforms to Civil Litigation which came into force at the start of April this year, the small claims limit has doubled, now standing at £10,000 for all claims excluding personal injury compensation. The upshot of these changes will no doubt be an increase in the number of cases pursued using the small claims process.

    Whereas the fast and multi-tract claims procedures tend to result in the losing party paying the winners costs as well as their own, the small claims procedure tends to lead to each party paying the majority of their own legal costs. The aim of the reforms is to encourage litigants in person and businesses with financial disputes to make use of the small claims procedure and mediation.

    The government has allocated more resources to the small claims track and litigants in person recently, the procedure and legal arguments used are not markedly different to those for higher value claims. However, because the losing party will not need to pay the other side’s costs, businesses could now find themselves out of pocket even if they win the case. As a result, many businesses are unlikely to make claims, meaning that they may end up being forced to waive up to £10,000.

    Many are concerned that the increased limit could make the non-payment of debts under 10,000 by debtors more probable because they know that, either way, they added expense will be limited.

    It is therefore crucial that creditors who are owed up to £10,000 instruct a specialist solicitor prior to court action who can help them recover debt through other avenues.

    Bonallack & Bishop – here to help with your business

    Our solicitor have years of experience helping businesses in financial disputes and they would be happy to help you with your business today.