Adding a partner to your business is an exciting step, but one that requires careful preparation There are several things you need to know about adding a partner to your business before you take the final steps.
Create a Shared Vision
In order to have success, both partners should have a similar vision for their business. It is very important that your new business partner shares your goals and your vision for your business. A “wrong” partner—someone who cannot work with you under a united vision—can bring down your business and damage your potential for success. When deciding to add a partner, it is important to search for one carefully so you and your business can benefit the most.
You and your partner must share common business objectives; clashing could irreparably harm your business. You also need to have trust. One fundamental purpose of having a partner is so you have someone to support you in your business. Before adding a partner to your business, talk commitment, expectations, and each’s vision for the company.
You should register your business to reflect the ownership of both partners. A limited liability company—or LLC— legal business form is very similar to a partnership legal form, but they are not the same. You need to decide which is better for your business, and register as one of the two.
LLCs have special advantages over partnerships for legal purposes. The biggest difference between LLCs and partnerships is liability. In an LLC, members are provided liability protection. In a partnership, however, each partner has personal liability, and can even sometimes be liable for the actions of other partners.
Determine Roles and Responsibilities
Before adding a partner to your business, determine what their role will be. How will you share the responsibilities in your business? Write down what your current responsibilities are, and then write down your vision for how they will evolve once your new partner is on board. Discuss your role and your partner’s role with him or her beforehand—it is important to avoid later confusion or misunderstandings that could harm your new partnership and your business.
Being prepared to add a partner to your business is essential before you make the addition final. Completing all the necessary steps and doing your necessary research beforehand will make the next era of your business better than ever.
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