Partnership Business Agreements in Ontario
You are currently deciding on starting a business with one or more individuals. It is crucial to have a full understanding of what precisely a Partnership Business License is before agreeing. Please keep in mind this page will only briefly outline some of these details. For a full understanding, you should speak to a business lawyer.
What is a Partnership in Ontario?
This type of business will consist of two or more owners that will combine their knowledge, finances, and any other resources each holds to run joint business operations. These partners can be individuals, corporations, or trusts.
All partners may have the legal right to make decisions that can directly affect the business, depending on the structure and the agreement in place.
Mr. Kleiman generally recommends a corporate structure with a shareholders’ agreement instead of a partnership, but he can help with either.
Tips on Making A Partnership Work
Choosing the right partner or partners in business is crucial to the health of the business. When choosing a partner or partners, make sure you see the value they are bringing with them that will help the company flourish. In most cases, the partner chooses each other because each one brings something different yet valuable to the table. It may be in the means of skills, knowledge, connections, or finances.
If you do not know the partner’s history, you may like to do some due diligence into their past that may include identifying any past partners they had in business, their field of education and work experience. If your new partner(s) are bringing investment into the business, you also may want to do a financial background check on the party.
Always clearly define each partner’s role and responsibility to the company and still have a contract drafted up by a business lawyer who specializes in contract law.
There are many tips you can research what makes partnerships work, but the strongest one is honesty. Always be straight forward with your potential partner(s) before agreeing. Lay all the cards out on what you can bring to the table and what you expect them to carry. Tiptoeing around things will only spell disaster for the future and can potentially put a business out of business.
Also, and I can’t stress this enough, family members, while they make may make good business partners, STILL NEED CONTRACTS! Even if you have no intention of enforcing them, good contracts set out the rules, so that there is less chance of a disagreement later.
A well-known Contract Lawyer in Toronto is Jonathan Kleiman, who can be contacted at 416-554-1639. He has the experience needed in drafting up a partnership contract.
For any questions to the above article on Partnerships in Ontario or any other guidance you may need, please call Jonathan Kleiman Toronto Business Lawyer to address your issues at 416-554-1639.