One of the most common forms of business is a partnership. This exist when two or more people combine resources to form a business entity. There are several things that need to be considered when going into a partnership. It is commonly known as the five “D”s of partnership. The five “D”s are death, disagreement, debt, divorce, and disability. I am going to replace debt with disinterest, because with a LLC (limited liability company) no personal liability is on either partner and I suggest that people do not go into debt. I am a firm believer in cash flowing life and business (I will do a separate post on that).
Death- Partners need to discuss what will happen if one of the partners pass away. Will their share of the company be split up between the remaining partners or will it be passed on to family heirs.
Disagreement- If partners come to a disagreement, there needs to be some form of arbitration agreement. This could cause problems with the partners and bitterness can form.
Disinterest- There have been incidents where one partner decided that they just do not want any part of the company anymore. There needs to be an understanding of what happens with their share in the event they just up and leave. This is more for those who are active in the company as an employee. If one partner is the CEO, then who would fill that role if they leave?
Divorce- If a partner gets divorced, part of the company that the partner owns could be awarded to the spouse. This is a problem that can be hard to deal with, so it is wise to investigate the life of whoever you are going into business with.
Disability- If a partner has a medical disability that occurs, what would happen then? How could they still function in the company actively or inactive?
Every business is different and will have to handle these issues in their own way. There is no blanket solution that everyone can follow. It takes responsible leaders to formulate these questions and answers to ensure the longevity of a company. I pray you are successful in your endeavors.
Jason Bordeaux
You can now join the Trackstarz Universe for exclusive content and great bargains.
Join now by clicking HERE to receive your FREE Trackstarz t-shirt!
