The Partnership Playbook: a Legal Guide to Business Partnerships

Business partnerships are a powerful way to grow your company’s operations and forge your way into new markets. But a successful business partnership needs more than just a handshake to work, even if you and your business partners already trust each other.

Even the most well-aligned business partners need help and guidance in making the best decisions for their venture. The way you set up your partnership’s fundamentals – from partnership formation to profit and loss distribution, dispute resolution, and partnership dissolution – can make or break your business goals.
That’s why our business lawyers put together the Business Partnership Playbook – a guide to all the legal considerations you must make in a business partnership.

Download the FREE Partnership Playbook now.

Nothing beats personalized legal advice from a knowledgeable business attorney who can set up your partnership for the best chance of success. This comprehensive PDF is not legal advice, but it can help you understand what to look out for and how a business lawyer can help. As always, you can contact our business law team at 215-482-0285 or book a call with us now.
The Partnership Playbook addresses the most frequently asked questions about business partnerships and helps break down what makes a successful partnership.

How Do You Form a Successful Business Partnership?First, you must decide if you and your business partner will create a new business entity for your partnership or contract as partners to work on a business project together. Your partnership will function differently based on how you answer that question.

1. How do you choose the right partner(s) for your venture?
2. What characteristics make for a good business partnership?
3. How do you make sure partners communicate and collaborate effectively?
4. How can you make sure your long-term vision and goals are aligned?
5. What do you need to include in your partnership operating agreement?
6. Where should you register your partnership’s principal place of business?
7. Which state’s governing law should you choose for your partnership?
8. Which partners will be general partners versus limited partners?
9. What will each partner contribute to the partnership?
10. How will you measure your partnership’s success?

The clearer you are on these questions going into your partnership, the better you’ll be able to orient your efforts to meet your goals, and the more solid your partnership’s foundations will be.
You get a huge advantage from considering important issues ahead of time – before they become problems. A business attorney’s job is to help you anticipate these scenarios that you might not otherwise even think about, saving you time, money, and headache later on.

Equity, Voting Rights, Distributions, Allocations, and Profit/Loss Division in Business PartnershipsLaying out each partner’s roles, responsibilities, and benefits is one of the best ways to avoid running into conflicts and disputes down the line. The Partnership Playbook goes over the following questions and how they can affect your business relationship:

1. What will each partner contribute to the partnership?
2. What’s the best way to structure ownership or equity in a partnership?
3. How should you structure voting rights in your partnership?
4. Which partner gets the final say on important decisions in the partnership?
5. Which partners are responsible for making which types of decisions?
6. Which decisions require unanimous consent by all the partners?
7. Do you have a designated tie-breaker in case partners are unable to agree?
8. Will any of the partners receive a salary from the partnership?
9. How will partners get paid? When will they get paid, and how much?
10. How will business profits get split between the partners?

These questions do not have a one-size-fits-all approach. The answers depend heavily on your unique circumstances, goals, and vision. Only a business lawyer can help you set up the best partnership configuration that’s tailored to your specific needs.
Your lawyer can also help you avoid common pitfalls and mistakes that entrepreneurs make when they don’t have the right counsel and advice.
For example, you may think the most sensical way to split a partnership between two partners would be 50-50 down the middle, with equal voting rights for equal or similar contributions. But a 50-50 split on decision-making can easily lead to stalemates that can stall or even dissolve the partnership. Instead, splitting power 51-49 between partners gives final decision-making power to one partner, allowing the partnership to continue functioning even when partners cannot agree.
Disputes, Critical Developments, and Partnership DissolutionsEven with the best planning and risk assessment, partnership disputes happen. Lives and circumstances change, leading to critical developments for the partnership. The better prepared you are to handle these curveballs, the better your partnership is bound to fare. In other cases, partnerships naturally dissolve when the business venture is complete – hopefully as a success.

When you work with a business lawyer, they can help you lay the groundwork for how disputes and critical developments are handled in your partnership.
The Partnership Playbook covers common scenarios and questions, such as:

1. What will you do if your business partner gets sick or moves away?
2. What if your business partner passes away or withdraws from the partnership?
3. What’s your contingency plan if you run into supply chain issues?
4. How will you handle your assets and debts if your partnership goes bankrupt?
5. Are you open to bringing on new partners? If so, how will this be handled?
6. What’s the best way to negotiate a partnership agreement modification?
7. How will the partnership handle potential offers for a sale/buyout?
8. How do you properly dissolve your business partnership?
9. How will you handle the partnership’s outstanding debts and assets after dissolution?
10. How can you protect yourself from liability through this process?

The right knowledge and advice can make a world of difference to how a business partnership will fare. The Partnership Playbook will help you better understand the strategies that make partnerships more likely to turn their visions into reality.

Download the FREE Partnership Playbook now.

Still, you need a personal approach to the unique needs of your business.
To get started, contact our business law team at 215-482-0285 or book a call with us now.