business agreement with partner

bonnerbob

Hey guys, wondered if you can help me, i wasn't sure where exactly to post this, but i guess it's trying to save me money so here it goes:

I'm starting a small company with a partner (i'm talking very small eg after work for an hour or two a night) we are both putting equal amounts of money into it, but have thought of getting a solicitor to write up an agreement for it. Howver the solicitor has quoted us £200 but I'm confident we have everthing covered in a agreement i myself have drawn up.

So my question is do you think i need to spend the £200 on the solicitor to make it legal....OR will it be legal anyway with the agreement i've found on the web?

Also is £200 too much?

richt71

I've had agreements drawn up before for me (by my dad a solicitor). Basically you can make an agreement as complicated or not. Make sure it covers who put what in and who gets what from profits. Also what happens if one partner wants to sell. They're the main points. However partnership agreements are someimes difficult to enforce as I found out - so trust is the main thing.

lectus123

If you are running the business as a partnership, then I would strongly suggest that you get a deed of partnership drawn up by a solicitor, for which £200 seems reasonable. This outlines how the profits are shared at the end of the accounting period.

If you are running the business as a Ltd Company, then you must decide how the shares are divided. A shareholders agreement can also be drawn up by a solicitor.

You have to remember that many partnerships do not work on a 50/50 basis: time, knowledge and money invested all have to be taken into account.

moneypooh

Definitely go for an legal document. Besides the usual share issues it would be worth sorting out what would happen if one partner wasn't able to participate in the business; i.e. incapacitated following an accident or illness. Some solicitors will recommend an EPA (enduring power of attorney) to help the other partner keep the business going if the partnership needs both to make decisions (banking for example)

Most small business advisors can help with this, like your local Business Link.