Jared Stanger
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    How to Form a Business Partnership

    Comprehensive step-by-step procedure with tips, best practices, resources and document templates you will need.

    Work Flow

    Starting a business or planning to expand an existing business can be a heavy burden. Many entrepreneurs consider bringing on a business partner – be it another company or someone who can balance the strengths and weaknesses, has better connections, and/or brings helpful experience to the team. If you are considering finding a business partner, check out the steps below.

    Process

    Know the Pros and Cons

    Partnerships have different classifications and legal requirements. Partnering with another company is different from adding a new individual (shareholder or partner) to your team. While a general partnership ensures equal access to profit, decisions, liability, and a helpful tax set-up, each of these pros can be used against a partner, especially if debts and lawsuits pile up against one of them.

    TIP: 1) First determine what will be the role of this new partner; will it be another company acting as a distributor or reseller? Or is it about adding a new individual to your management team, essentially adding a new “owner” or shareholder to the company?

    2) Do your research on LLCs, corporations, and the different kind of partnerships (like distributor, reseller, supplier, franchise, dealer, etc) before signing a deal as this is one of the most important and impactful contracts you will sign for your business.

    Checklists: Partnership Agreement, Drafting Joint Promotion Agreements.

    Agreements: Joint Venture Standard, Joint Venture Detailed, Reseller, Manufacturing & Distribution, OEM Distribution & License, Supply, First Supply, Strategic Alliance & Supply, Product Supply, Dealership, Franchise.

    Process

    Find the Right Person / Company

    What kind of partner do you want and need? Look to your friends and family, business contacts, networks, online sources like Upwork.com and community organisations like your local Chamber of Commerce.

    TIPS: 1) Analyse your competitors; do they have that ‘special’ partner that seems to do wonders for their business, be it a seasoned executive, a distributor, a reseller, a supplier, etc?

    2) Spend time with your potential partner(s). Meet in different contexts and occasions, get to know the potential partner(s) and ask for references.

    3) Know your own strengths and weaknesses before vetting someone else.

    Worksheets: Strengths & Weaknesses, Management Audit, Evaluating Management Performance.

    Process

    Define Your Vision and Goals

    If your potential partner’s goal is to start a chain and your goal is to focus on one big business, you might not want to form a partnership. The vision and goals must be perfectly aligned, or chances of success will be slim.

    TIP: Meet and chat to discuss all the important issues. Write everything down.

    Checklists: Organisation Wide Goals.

    Process

    Define Roles and Leadership

    Assign clear roles and responsibilities, along with objectives and deadlines (if relevant). Also discuss what happens if goals are not met by one of the partners. Determine who will have the ultimate leadership power – a 50/50 split is not always good, especially if the partners are not bringing elements of equal importance to the table.

    TIPS: If you find you cannot reach a business agreement on something, someone needs to have the final say. If you want to avoid a blatant 40/60, consider a plan for locked disagreements: an intermediary, role of the dice, etc.

    Worksheets: Employment Contract.

    Process

    Draft an Agreement

    Keeping in mind all the above-discussed things, draft an agreement that is a win-win for both parties. Detail everything, including an exit strategy should things go south.

    TIP: 1) Check out the legalities carefully for things like what happens if your partner dies, gets sick or disabled or is otherwise unable to continue his or her duties.

    2) Remember that it is critical you establish the appropriate form/type of partnership considering the business relationship you are putting in place.

    3) Hiring a lawyer to review this legal agreement might be a good idea as it will be a very important document for your business.

    Agreements: Joint Venture, Joint Venture (Detailed), Limited Partnership, Limited Partnership (Detailed), Offering memorandum Limited Partnership, Partnership Agreement (Short Form), Partnership Agreement (Long Form), Option to Acquire Partnership Interests, Exclusive Distribution, Distribution Software & Multimedia, Distribution Software, Distribution Software (Exclusive), Distribution Software (Exclusive & Long Form).

    Process

    Finish the Legal Steps and Publicise the Partnership

    If you are forming a business for the first time or expanding, there are still a lot of legalities to keep in mind, such as registering your name, obtaining permits from the government, registering your type of business, etc. Check with your local tax office for exact details.

    TIP: Check our processes on “How to Start a Business” and “How to Incorporate a Company” as they contain some useful information if this partnership is resulting in the creation of a new entity. Depending on the circumstances, you might want to publicize or announce to some selected parties, your new partnership.

    Press Releases: New Partnership / Collaboration, New Distribution Channel, Announcement of Business Merger, Announcement of New Area Representative, Announcement of Partnership Buyout.

    Process

    Evaluate Regularly

    Have monthly meetings to look over the partnership. If things are not working well, consider breaking free or re-organising your business structure.

    TIPS: Good communication creates longer-lasting partnerships. Work on being transparent, honest, and humble.

    Correspondence Notice of Intent to Exercise Option(s) to Acquire Partnership Interests, Notice of Dissolution (Partnership).

    Frequently Asked Questions

    Some answers to questions that pass through peoples minds when they read my website. Feel free to contact me if you have any other questions.

    01. Is my privacy and information secure?

    Absolutely. We begin with an 'empty' document template that is 80% complete and add your relevant information to it. Each client engagement starts with documents that have never been used before.

    02. What is the process to get started?

    We sign the privacy documents and non disclosure document and client engagement contract. Those documents protect us both. Then we get started on what ever your project involves.

    03. What is your background and qualifications?

    I am a Government licensed Private Investigator, Business & Risk Analyst. I currently have standing contracts with Corporate and Government clients (references available).

    I have Diplomas in Financial Services, OH&S, Govt Fraud Control, Govt Fraud Investigation, Security & Risk Management. I have 9 Cert IV qualifications.

    I became a Microsoft Certified Systems Engineer in 2003.

    Since 2002 I have worked as an Investigator/Analyst on dozens of projects in New Zealand and Australia.

    04. Why are the not any testimonials on your website?

    I have been building websites since 2003 back when we used MS Front Page to write code. I think testimonials on websites are nonsense. I never read them.

    If you want testimonials then contact me and I'll give you the details of people I have been working with for years. You can give them a call and they will tell you about me.

    05. Why cant I find you on social media?

    I'm an investigator and analyst who does sensitive work for clients. Nothing I do needs to be on any social media.


    I build websites so I can be found online within in an online environment that I control 100%.

    If you contract me to build a website for you then I am happy to develop an overall social media strategy for you.

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