2. How are decisions made? It is a good idea to establish the right to vote in case there are greater differences of opinion. If only two partners own the 50-50 company, there is the possibility of a dead end. To avoid shutdown, some companies provide a third partner in advance, a trusted partner who owns only 1% of the company, but whose voice can break a tie. Individuals, individual entrepreneurs, even existing partnerships or other entities may decide to enter into a partnership agreement. It is often as simple as an oral agreement, although this approach is rarely the least expensive. Choosing the right type of partnership, the total number and types of partners, as well as the type of partnership, plays a role in the total cost. Partnerships are governed by the law of the state in which they are organized and by the rules established by the partners themselves. Typically, partners set the rules in a partnership agreement. However, it is worth having a partnership contract formally established by a legal expert to ensure that the interests of all partners are protected. Although this is an uncomfortable pre-cost, the legal fee required to establish a partnership contract is a one-time fee and can then save partners a huge amount of money in the event of a commercial dispute. Depending on the length and depth of the agreement, as well as the territory fees and individual legal fees, the overhead for a proposed partnership contract will reset you between $500 and $2000.
1. How are ownership shares shared? It is not necessary, for example, for two owners to share ownership and authority equally. No matter how you decide to do so, make sure the portion is clearly indicated in the agreement. An approach used to avoid this dilemma is found when developing partnership documents by distributing another portion of the revenue or profits to partners who are likely to pay the least tax as a result of the partnership. In addition, the creation of a capital company and the entry into partnership – rather than as an individual – can alleviate certain tax problems for a partner in exchange for a higher cost of acquisition. If the new partner replaces one of the original partners in the partnership, the partnership is considered technically dissolved.