Be sure to review the previous Mini-Series installment here: How to Choose a Business Entity
When starting a new business with another party, the most common impulse is to split ownership 50/50 with both partners sharing equally in the profits, losses, and management of the company. The most obvious issue with this arrangement is that when the partners hit a disagreement, this can result in a gridlock, paralyze the company’s operations, and jeopardize its sustainability. If the issue cannot be resolved, the only recourse may be to dissolve the business. However, with some careful planning in your internal governance documents, you can set up your 50/50 partnership for success.
Here are the major areas to consider in a 50/50 ownership:
Are you ready to draft your Partnership Agreement but not sure what key language you may be missing? A seasoned business attorney can help you implement solid provisions that address the management, responsibilities, rights, and obligations of the partners. Some business attorneys offer flat fee arrangements and quick turnarounds for this service.
Andrea A. Tarshus, Esq. founded Tarshus Law Firm in 2015 to provide efficient, accessible, and fair General Counsel legal services to businesses and business owners. Tarshus Law Firm represents Western New York and Buffalo based businesses as well as large international and publicly traded corporations in industries such as: audio video (“AV”), products distribution, transportation and logistics, medical marijuana, marketing, social media, healthcare, and other sectors.
Andrea’s engagement with businesses regularly includes business formation, negotiating and executing favorable contracts, legal research and writing, project management, administering internal legal and operational controls, problem-solving, and strategizing. She enjoys working with business owners, C-suite executives, and company managers to create a comprehensive legal and business framework that supports operational efficiencies and strategies for growth.
This article is intended to be informational in nature, should not be relied upon by the reader without consultation with an attorney, and does not create an attorney-client relationship between the author and reader.