R. Shawn McBride recently spoke about partnership agreement form and why there is not just one form. Here is the transcript:
Folks, R. Shawn McBride with you here live, getting ready to give a presentation here shortly. I’m going to be talking about business partnership agreements, which brings up a recent issue. I was recently contacted, this happens over and over again, somebody said, “Can I get your form for a partnership agreement? How would I form a partnership? Do you have a document?” The truth is, for somebody that’s doing a quality job on partnerships, there are no one set of form agreements. Each partnership is going to be different. Now, there’s multiple forms. Over our experience, we work with clients on forming partnerships. I have agreements that I go to, but no one form. I’m not starting with some particular form. I’m talking to the partnership, and there’s a lot of things I want to know, because I’m going to do a lot of customization.
I’m going to look at who are the partners. I’m going to look at what is their financial standing? Who am I representing? Am I looking out for one partner? Am I looking out for multiple partners? How is that going to interplay in the partnership agreement? How is money going to be allocated? What am I going to do if the partners get into a disagreement? What happens if the partners get into a situation, one of them dies? Does the ownership interest go to their family or do I bring other people in? There are many, many issues I’m looking at in a partnership agreement. How transferrable are the shares or the ownership interest in the company? What happens if a creditor gets involved?
The point is that each one of these partnership agreements is very, very custom, so I want to look at each partnership, I want to talk to the partners, I want to understand what they’re trying to accomplish, and then I have to figure out who I represent. I did an earlier video about who’s the client. Who do I represent? If I’m looking out for one of the partners, some of the forms are going to work better for one partner than for others. These are the type of issues that are going to come together in a partnership agreement. There’s truly no one form. It would be like calling a car dealer and say, “how much does a new car cost?” If you call a Toyota dealer, you’re going to get a very different answer than if you call a Ferrari dealership, and you’re going to get a very different car and different product.
Even within a class of cars, the same model could cost twice as much when you put features and options in it. The base model would be this much, and the same car fully loaded with the upgraded interior and heated seats and all the other stuff that you may want may cost twice as much. Still a car. It has the exact same nameplate on the back and different prices. Same with partnership agreements. Simple partnership agreement, provisions that are very basic, don’t have a lot of protection to them, could cost a lot less to draft. One that’s very custom, that’s very protective, that’s very tailored to your needs could be more expensive. You got to look at the scope of what you’re doing.
We as attorneys want to work with you. We just want to understand what you want and what you want to accomplish, and then we can take it from there. R. Shawn McBride, www.mcbrideattorneys.com/blog will get you more great information like this about how to set up your partnership, how to set up your business. I want to know what issues are pressing upon you, reach out to me. Subscribe to our newsletter and keep in touch. Make sure you follow the R. Shawn McBride fan page on Facebook if you haven’t done so, because I’d love to keep in touch with you. Let me know what you need to hear, and we will see you again soon. Shawn McBride signing off.
This posting is intended to be a tool to familiarize readers with some of the issues discussed herein. This is not meant to be a comprehensive discussion and additional details should be discussed with your attorneys, accountants, consultants, bankers and other business planners who can provide advice for your circumstances. This article should not be treated as legal advice to any person or entity. Each case is unique. Past results do not guarantee future outcomes. Freeimages.com/photographer Simon jackson.
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