If you are one of the many entrepreneurs in Colorado who is excited to get your new business venture off the ground, you may have decided that teaming up with another person is right for you. A partnership can give you access to additional capital, essential market or product expertise and a different perspective to bring to the management table.
When solidifying your role in the business, you and your partner will likely outline the responsibilities each of you will hold. You may also detail what assets each party will bring to the table. Forbes explains that along with these things, you and your partner create a careful and thoughtful buy-sell agreement. While a buy-sell agreement may be viewed akin to a prenuptial agreement, it can be useful in situations far beyond a partnership dispute.
Buy-sell agreements can detail how a business transition will take place if one person decides to retire before the other person. The contract may also identify a course of action in the event that one person becomes ill or disabled. The death of one partner is another even that a buy-sell agreement can prepare a business for. This contract can identify how a business may be valued, assign a first right of refusal to purchase the business to the remaining partner, and more.
If you would like to learn more about how you and your new business partner can effectively plan ahead to prevent unnecessary disputes due to often unexpected situations, please feel free to visit the partnership agreements and contracts page of our Colorado business law website.