Partnership agreement, things to include?
Discussion
Unless something goes wrong, I will shortly be consulting a solicitor about drawing up a partnership agreement, as I am selling a half share in my kit car building and repairing business, with the intention that both I and my partner will work full time in the business.
I have several ideas that I want incorporated into the agreement, the main features of which are to set out an equitable exit procedure, and the other will be to recognise each partner's time input. On that second point I want there to be some kind of time keeping procedure and I want the money each partner is able to take out to be closely related to the time they put in.
Any suggestions about these, and any other aspects that the agreement should contain would be gratefully received.
I have several ideas that I want incorporated into the agreement, the main features of which are to set out an equitable exit procedure, and the other will be to recognise each partner's time input. On that second point I want there to be some kind of time keeping procedure and I want the money each partner is able to take out to be closely related to the time they put in.
Any suggestions about these, and any other aspects that the agreement should contain would be gratefully received.
Eric Mc said:
Have you thought about operating through a limited company?
It's my intention to consult a suitable accountant at an early stage in the process, the kind of person I am looking for would be someone with an interest in motoring matters, especially in kit cars, within a hundred miles of my location and if they had some kind of Irish connection (as I do) that would be great too.If he or she recommended forming a limited company then that is what I would do, though I have to confess I hadn't though about it up til now.
singlecoil said:
Eric Mc said:
Have you thought about operating through a limited company?
It's my intention to consult a suitable accountant at an early stage in the process, the kind of person I am looking for would be someone with an interest in motoring matters, especially in kit cars, within a hundred miles of my location and if they had some kind of Irish connection (as I do) that would be great too.If he or she recommended forming a limited company then that is what I would do, though I have to confess I hadn't though about it up til now.
I would certainly look carefully at the limited company option. partnerships are legitimate and viable methods of running businesses, but they offer less flexibility, particularly with regard to tax planning, than a company.
The limited liability aspect could be covered by a limited liability partnership - but I do not think thay are the best business vehicle for a normal trading operation.
So, in general, would it be best to consult an accountant and decide what the structure should be before consulting a solicitor (who presumably could advise on how best the obligations and perogatives of each 'partner' can be made binding)? Or should it be the other way round? Could an accountant take care of both aspects?
Edited by singlecoil on Monday 15th March 09:43
singlecoil said:
So, in general, would it be best to consult an accountant and decide what the structure should be before consulting a solicitor (who presumably could advise on how best the obligations and perogatives of each 'partner' can be made binding)? Or should it be the other way round? Could an accountant take care of both aspects?
Go to see the accountant first to get advice on the best structure from a tax perspective. Solicitors can pretty much put whatever you need into either a partnership agreement or a shareholders' agreement so that you each have the protection you need.Edited by singlecoil on Monday 15th March 09:43
I'll zap you a copy of a checklist that I have for things that you might want to consider in either a partnership or shareholders' agreement so that you can start thinking about the legal aspects (I've got your email address from previous PM's).
Best of luck with it.
therealpigdog said:
I'll zap you a copy of a checklist that I have for things that you might want to consider in either a partnership or shareholders' agreement so that you can start thinking about the legal aspects (I've got your email address from previous PM's).
Best of luck with it.
Thanks, I will study the material carefullyBest of luck with it.
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