What to consider before teaming up with a partner.

May 15, 2019 1 min read

Opinions expressed by Entrepreneur contributors are their own.

Going into a business with a partner? Here are key things a partnership agreement should have to ensure smooth sailing.

1. Determine how ownership interest will be shared. It’s not always split evenly down the middle, so be sure ownership and authority proportions are stated clearly in the agreement.

Related: Everything You Need to Know About Business Partnerships

2. Establish how decisions will be made. If you own the business 50-50, there’s a possibility of a deadlock. To avoid this, some businesses set up a trusted associate who may own 1 percent of the business and whose vote can break a tie.

3. If one of you wants to withdraw, how will a buyout price be determined? Agree in advance that a neutral third party, like your banker, will find an appraiser to determine a fair price.

Watch more 3 Things to Know videos here

You May Also Like

What Is a Scrum Master? Everything To Know.

If you’re new to the business and project management world, you may…

Don’t Wait For a Lightbulb Business Idea to Come to You, Go Out There and Find It

Opinions expressed by Entrepreneur contributors are their own. A majority of professionals…

En Francia, los futuros agricultores son expertos en tecnología y quieren los fines de semana libres

“Cuando no estás en este sector es muy fácil decir: ‘Voy a…

Need a Mental Break? The ‘Meet Cute’ Podcast Delivers Rom-Com Escape in 15-Minute Bursts

Naomi Shah’s podcast company packs original romantic comedies into 15-minute podcast episodes.…