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Use this worksheet to determine with your partners the terms of your partnership. Then meet with a lawyer to draw up a formal partnership agreement.

Ownership Division. Who owns what percent of the business?

Jobs/Responsibilities. What jobs and responsibilities does each partner have? Can partners work for any other company or do any other work on the side?

Decisions. How will general business decisions be made? What decisions does each partner have final authority on? Who has the final authority for decisions for the company as a whole?

Communication. How will you communicate on a regular basis? How will serious disputes be resolved?

Exit Strategy and Dissolution Agreement. What happens if one partner wants to leave the business or move? What if one partner wants to sell the company? What happens if a partner dies or becomes disabled?

Other:

If you’re going into business with other people, even a spouse or friend, formalize your arrangement with a written partnership agreement. Take the time to work out as many details as you can. Be certain to include a way to buy each other (or each other’s heirs) out of the business. A messy “divorce” from a business partner is as difficult as a messy marital divorce—with potentially greater financial consequences. Drawing up an agreement now will help avoid difficulties if you later decide to go your separate ways.

Use the guide “Questions to Ask: Potential Partners” on page 19 to discuss the nature of your relationship. The worksheet “Discussing Partnership Terms” on page 20 outlines important issues that can later become part of a formal agreement, drawn up with the help of a lawyer.