The decision to open and run a Box with a business partner is an exciting one. It’s hard to find a person who shares in your vision, who’s trustworthy, and who has the type of dedication it takes to open and manage a new venture. So if you’ve found the ideal partner, then working and growing a business together should be a rewarding and successful undertaking.
But as anyone will tell you, choosing a business partner is one of the most important decisions—if not the most important decision—you’ll make as a new business owner. Clearly there are many valid benefits to co-ownership, but those benefits are quickly undermined if partners don’t hash out certain key elements of their business relationship. Even when both owners have the best intentions in mind, making assumptions about your partner’s intentions or avoiding tough conversations sets the groundwork for a difficult business relationship.
With so much at stake, co-owners should establish the key elements of their business and legal structure from the outset, and create a roadmap for how they intend to handle their business operations. While there’s no one-size-fits-all approach to establishing a solid business foundation, there are a few key issues every partnership should consider.
These are just a few key issues partners should iron out, regardless of whether you and your partner are just starting or have been co-owners for years. These issues generally are memorialized in a written document called an operating agreement — for an LLC — or bylaws — for a corporation — and can be drafted by a small business attorney. Think of this document as the constitution of a newly formed company. Having these points in writing can help to avoid conflict, guide company decisions and provide owners with peace of mind.
Bottom line: Don’t assume that you and your partner are on the same page about key aspects of your business, and don’t avoid discussing difficult issues. The longer they’re left unaddressed, the greater the chance they’ll surface and spoil your exciting undertaking.
NOTE: None of the information in this article is intended to create an attorney-client relationship. This article has been prepared for informational purposes only, does NOT constitute legal advice and is not a substitute for seeking legal counsel from an attorney.