When going into business, many Texas residents understand the importance of contracts and agreements. Often, having an agreement could help prevent partnership disputes from taking place or at least outline how to handle disputes in the event that they arise. Because of these benefits, creating an agreement could prove wise.
Knowing what to include in a partnership contract may not always be clear, and details may differ from business to business. However, certain information may be needed in most agreements. For instance, parties may want to ensure that they put in conditions regarding the amount of shares or percentage of profit as well as how much loss each person may end up absorbing. It may also prove wise to limit how much money each individual can draw from the company.
Though individuals are considered partners, they may have different roles and responsibilities. While some people may think that a spoken agreement may suffice in this area, it may prove more beneficial to have those responsibilities in writing. With this documentation, the right parties could be held liable in the event that certain issues are not handled properly.
Each business may need more or fewer terms in their contract than the next company. Of course, even with a minutely detailed agreement, partnership disputes may be unavoidable. If Texas residents have found themselves facing this type of situation, they may want to consult with their legal counsel on their best options for addressing the problems. They may also want to ensure that they understand their partnership agreements, especially if there are terms regarding dispute resolution.
Source: business.com, “How to Create a Partnership Agreement“, Marci Martin, April 4, 2018