Navigating Administrative Problems Without a Written Agreement: How Unmarried Partners Can Protect Their Business
Running a business with a partner can be an exciting and rewarding venture, but it also comes with its fair share of challenges. When two unmarried partners start a business together, it can be tempting to dive right in without taking the necessary administrative steps to protect their investment. One of the most critical elements in any business partnership is a written agreement that outlines each partner`s responsibilities, the company`s mission, and how the partners will handle disputes.
Unfortunately, not all partners are savvy enough to consult a lawyer and get a written agreement before starting a business. This situation leaves them vulnerable to administrative problems that they may not have considered. Without a written agreement, the partners need to be prepared to come up with solutions to these issues as they arise.
In this article, we will look at three common administrative problems that unmarried partners encounter when they start a company and how they can solve them without a written agreement.
1. Division of Profits
When two people start a business together, it`s essential to decide how they will divide the profits. Without a written agreement, each partner may feel entitled to a more significant share of the profits than the other. If the partners cannot come to an agreement, they may need to hire an arbitrator or mediator to help them resolve the issue.
2. Decision Making
In a partnership, it`s crucial to establish how decisions will be made. Each partner may have a different approach, and without a written agreement, it can be difficult to come up with a plan. The partners need to decide if they will make decisions jointly or if one partner will have more decision-making power than the other. If there is no agreement, the partners may need to consult with each other or hire a third-party consultant to help them make decisions.
3. Business Dissolution
If the partners decide to dissolve the business, it`s essential to have a plan in place for how the company`s assets will be divided. Without a written agreement, each partner may feel entitled to more than the other. The partners need to come up with a plan for how the company`s assets will be divided if the business ends. If there is no agreement, the partners may need to hire a mediator or arbitrator to help them resolve the issue.
In conclusion, having a written agreement is the best way to prevent administrative problems in a business partnership. However, if two unmarried partners have started a business without a written agreement, they can still take steps to solve the inevitable administrative problems that arise. By being open and communicative with each other, the partners can come up with solutions that benefit both of them and protect their business investment.