Going into business with friends and family can be a risky proposition. You may be tempted not to bother with contracts and signatures when you feel the bonds of trust are ample. But what if it all comes unstuck?
The lovely folk at the Law Society have put together a comprehensive document, nick-named the SME-nup, to ensure that partnerships with friends and family are based on more than just a handshake.
The document follows research by O2 that found 68 per cent of partnerships are based on oral contracts only. Not surprisingly, it is family partnerships that are most likely to forego the legal process.
Andrew Holroyd, President of the Law Society, says: “People don’t go into business together expecting to fall out. It’s all too easy for them to fail to take the correct legal precautions or seek sound advice before launch.
"Such a large number of small businesses operating without any kind of protection is alarming and some kind of partnership agreement is crucial.”
If you are one such company, take a look at the checklist. It’s actually pretty useful.
Remember, don’t let personal relationships cloud your commercial judgement. Or, as Don Corleone would say: “It’s not personal, Sonny. It’s strictly business.”
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