When entering into a new business venture with a partner, it is always important to develop an Operating Agreement Miami or Partnership Agreement. This will help investors understand their legal obligations to their business and each other, as the company progresses. Having an outline of these preset terms can help avoid much more complicated disputes in the future. Although each agreement is specifically tailored to your unique business, here are five topics that should always be considered.

Capital Contribution and Ownership

Although this may be something that has already been discussed, it is necessary to be clear on just how much is being invested into the company by each party. In addition to that, is the ownership of the company relative to the amount being invested? A clear division of power in terms of how ownership is determined is needed to establish clear boundaries.

Decision Making and Management

Along the lines of ownership, comes the appointment of a decision-maker. Many businesses have an understanding between partners that allows both partners to make decisions on behalf of the company. Others choose to make the majority investor the main decision-maker and have the other partner handle the managerial duties. What are each partner’s responsibilities?

Economic Rights

Things begin to get a little more complicated when the conversation shifts to finances. Some important things to take into consideration are specifics in terms of when money can be taken out of the company, as well as profit and loss distributions. The goal is to set a clear method as to when and how distributions will be allocated among members

Death and Disability

In the unlikely event that one of the founding members is rendered unable to make decisions, or dies unexpectedly, there needs to be a plan in place as far as how to move forward. If there has been someone established who will inherit the shares, it must be decided if this beneficiary is also granted the same decision-making abilities as the deceased or disabled

Dissolution

It can be uncomfortable to talk about the end of your company before the beginning has even begun. However, having exit plans in place will ease any worry when and if the time does come. Many people decide to include problem-solving strategies in their Partnership Agreement, in the event that the parties are having difficulty communicating. If one founding partner decides to leave, decisions must also be made as far as the distribution of that person’s shares, whether or not they will receive any compensation upon their exit, and if notice must be given in advance.

A Partnership or Operating Agreement Miami marks the beginning of a new chapter for many. However, it is always most important that the proper steps are taken to ensure protection for everyone involved. These provisions provide a guide as to what should be thought about and help show the importance of entering into an agreement before beginning your business. This article should not be used in place of any legal advice. All Partnership and Operating Agreement Miami should be discussed with a Trademark Attorney Miami or other attorney that has a business law background. Please contact us regarding the specific needs of your business.