Three Areas To Consider When Planning Your Michigan Partnership
If you're planning a Michigan partnership, chances are that you've got a solid business plan and a general oral agreement as to who will do what and how the company will run on a daily basis.
While those details are a good start, the small and mid-sized business attorneys at Hickey, Cianciolo, Finn & Atkins, PC warn that planning a successful Michigan partnership needs a bit more detail to protect the business and everyone involved in it. Creating a solid partnership agreement provides guidelines so that everyone is clear on what happens when things don't go according to plan or unforeseen decisions need to be made.
Here are three general areas which every start up business should consider and commit to a written partnership agreement:
- Capital contributions / withdrawals. While the initial decision of who contributes what is generally a given going in, the question of how to infuse additional capital into the business later, how to withdraw capital, and when initial investments get repaid should always be committed to writing. Nothing will sour a good relationship more than disputes over money.
- Decision making. Every company, whether a retail establishment, e-commerce site, accounting firm, law practice, medical practice or something else will require partners to make decisions. While most partners assume those decisions will be made “together,” the truth of the matter is that people will inevitability disagree.
So, what happens then? A solid partnership agreement can address whether business decisions must be unanimous, by quorum or some other way. Leaving this detail undefined can lead to trouble down the line – especially when partners have differing opinions on which direction the business should go.
- Dissolution. Most partnerships simply don't address this topic up front as spirits are high during the formation and, for lack of a better term, it's kind of a “bummer” to discuss. However, having a plan for what happens when someone dies, becomes ill or disabled, or simply doesn't want to continue should be addressed in the agreement – again, so that everyone is clear on what happens next.
Having an experienced Michigan partnership attorney who can provide business law advice from creation through dissolution by customizing an agreement(s) for your venture can give you the peace of mind that every detail pertinent to your situation has been addressed. Then, you can do what you do best – run your company.
Don't Leave Your Future To Chance
So many entrepreneurs who enter into business start-ups together tend to ignore what will happen if the venture goes sour. It can cause a real strain between the partners, their families and their friends. Having a partnership agreement drafted by an experienced start-up attorney can diffuse those types of situations by simply making sure that everyone is on the same page. However, keep in mind that every agreement is unique and must be tailored to your situation.
Don't leave your future to chance. Contact the experienced business law attorneys at Troy, Michigan-based Hickey, Cianciolo, Finn & Atkins, PC. For over 30 years, we have proudly represented clients in Troy, Oakland County, metropolitan Detroit and throughout Michigan. We welcome you to contact us by calling 248-247-3300 or by using our online form.