3 Things to Know About Going Into Business With a Partner (60-Second Video)

What to consider before teaming up with a partner.

Grow Your Business, Not Your Inbox

Stay informed and join our daily newsletter now!
Entrepreneur Leadership Network Writer
Journalist
1 min read
Opinions expressed by Entrepreneur contributors are their own.
Going into a business with a partner? Here are key things a partnership agreement should have to ensure smooth sailing.

1. Determine how ownership interest will be shared. It's not always split evenly down the middle, so be sure ownership and authority proportions are stated clearly in the agreement.

Related: Everything You Need to Know About Business Partnerships

2. Establish how decisions will be made. If you own the business 50-50, there's a possibility of a deadlock. To avoid this, some businesses set up a trusted associate who may own 1 percent of the business and whose vote can break a tie.

3. If one of you wants to withdraw, how will a buyout price be determined? Agree in advance that a neutral third party, like your banker, will find an appraiser to determine a fair price.

Watch more 3 Things to Know videos here

More from Entrepreneur

We created the SYOB course to help you get started on your entrepreneurial journey. You can now sign up for just $99, plus receive a 7-day free trial. Just use promo code SYOB99 to claim your offer.
Jumpstart Your Business. Entrepreneur Insider is your all-access pass to the skills, experts, and network you need to get your business off the ground—or take it to the next level.
Entrepreneur Store scours the web for the newest software, gadgets & web services. Explore our giveaways, bundles, "Pay What You Want" deals & more.

Latest on Entrepreneur