When a Handshake Is Not Enough: Why You Need a Partnership Agreement
Going into business requires careful preparation and planning, especially when teaming up with a business partner. As partnership dispute lawyers know all too well, a handshake is not enough to protect your business from unexpected disputes. Let’s go through the key reasons why you need a partnership agreement to safeguard your business, according to the leading commercial litigation lawyers in Sydney.
Easing Uncertainty
If you are going into business with another person or a group of people, technically you are not legally required to have a formal contract. However, while these “handshake” agreements in a verbal partnership may seem good on the surface, they leave a lot up in the air if any conflicts or legal troubles were to arise in the future.
A written partnership agreement eases this potential uncertainty and provides attractive benefits like preventing serious disputes, avoiding dissolution due to conflict, and flexibility in partner salaries and partnership arrangements going forward.
Key Partnership Objectives
A partnership agreement formalises the terms you talked about when you started your business with another person. This legally binding agreement confirms the tax and contractual obligations for each partner and clearly outlines responsibilities. If one party does not adhere to this agreement, then there is the potential for legal action with partnership dispute lawyers in the future.
However, if all you have is a handshake agreement, then it’s more difficult to seek legal recourse in the event your working relationship sours. Having seen these challenges firsthand, an experienced commercial litigator will always recommend a partnership agreement to safeguard your business.
Decision Making
One of the main reasons why businesses hire commercial dispute lawyers is if they cannot reach an agreement on key decisions regarding the future of the business or partnership. With a clear partnership agreement, it’s easier to navigate these potential challenges of running a modern-day business with partners who may not always see eye to eye.
Financial planning, investments, and exit strategies are all fundamental to the overall success of a business, and even the top commercial litigation lawyer in Sydney is much more likely to achieve the desired outcome in legal proceedings with a partnership agreement.
Schedule a Consultation With Commercial Dispute Lawyers in Sydney
Knowledgeable partnership dispute lawyers understand the value of partnership agreements considering the complexity of running a business. If you’re interested in learning more about partnership agreements, the commercial dispute lawyers at Lancaster Law can help. Get in touch with the best commercial litigation lawyer in Sydney today.
