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Things you should know before you start a partnership

When you and your partner started your Arizona business, you were probably full of excitement for the future and the success of your company. Over time, this working relationship you have with your business partner may change, eventually ending up at a place where neither of you are happy. While a partnership is often a smart business entity choice for many entrepreneurs, there are some risks involved with this selection. 

Before you choose to move forward with a partnership, it is in your interests to look closely at all of your options. It is prudent to understand all of the potential drawbacks associated with a partnership, allowing you to make the best possible choice for your individual situation. Taking the time to do your research will help you avoid complications and lay the foundation for the long-term success of your company.

Points to consider 

There are many things to consider when thinking about a partnership for your company. In addition to the benefits of this popular choice for business owners, there are also a few things that you may consider to be a drawback. Some of these things include: 

  • It is not easy to transfer one partner's stake in the business to other partners if he or she wants to leave in the future.
  • Individual partners are liable for all of the choices made by the partnership as a whole. Each partner's personal assets could cover business debts.
  • A partnership can end suddenly if one partner dies, files for bankruptcy or decides to leave. This can happen unexpectedly and without warning.
  • It is not always easy in a partnership to decide which partner is responsible for what. Unclear authority can lead to issues between partners.

These are a few reasons why it is in your interests to draft a thorough and enforceable partnership agreement when making this choice for your company. Due to the potential problems you could face, this is a smart way to protect your interests and outline the responsibilities of each business partner.

The future of your company 

When considering a partnership or making any choice that could impact the future of your business, you will find it beneficial to speak with an experienced attorney regarding your rights and interests. The input of a legal professional who understands business law can help you make choices that will ensure your future success and reduce your exposure to possible problems down the road.

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