Partnership and Commercial Agreements
If you are starting a business with a best friend, family member or just an acquaintance, a Partnership or Commercial Agreement is essential for peace of mind.
This type of agreement is often negotiated at the commencement of a business arrangement, when the relationship is amicable, between all people involved.
The agreement sets out everyone’s rights and obligations to what they can and can’t do. For example, if a person chooses to leave the business at a later date, the Partnership Agreement would define what this person has the ability to do in order to sell their interest and exit the business.
There is a belief that given the close personal relationship two people have negates the need to have a formal Partnership or Commercial agreement.
This is not the case, circumstances change. That is the reality.
Therefore, a formal agreement helps define the nature of the partnership, including:
- How a business dispute is resolved;
- How a person can exit the business;
- What happens when a person has an accident and is unable to perform their duties within the business;
- What happens when a person passes away.
Once an agreement is in place, each person knows what their obligations, rights and expectations are.
When a business or the partners are no longer functioning in a positive or productive way, being able to produce and rely upon a written agreement is crucial.
Winding up a business that has a water-tight partnership agreement costs far less than the cost to take the matter to court. Many disputes can be resolved quickly or avoided altogether with a Partnership or Commercial Agreement in place. However, if the agreement is poorly drafted or there is no such document, then the matter is likely to result in a costly dispute with no guaranteed outcome.
Mackinnon Jacobs Lawyers have experienced lawyers who deliver clear and concise legal advice, so you are protected when creating formal Partnership or Commercial Agreements.
If would like our lawyers to provide you with personal, tailored advice, call or contact us via email.
Would you like to know more?Contact our Commerical and Business Law expert Anthony Presutto on 1300 424 452 to receive personalised advice about your case.