Before you and your partner start up your new business, you should consider creating a partnership agreement. A partnership agreement can be a useful tool to prevent unnecessary turbulence for your business by setting out plans for how to navigate various situations that may arise. It can also be helpful in avoiding miscommunication between you and your partner.
Partnership agreements can be complicated because they aim to cover such a wide variety of possible situations. However, most partnership agreements should cover what is expected of each partner, how the profits and losses will be distributed, how ownership of the business could be affected by certain scenarios and what the protocol is for resolving disputes.