In last week’s post, we provided a specific example of a partnership arrangement gone sour. In today’s post, we provide additional partnership tips for small business owners, in particular.
By many accounts, small businesses are a measure of an economy’s health. For that reason, there are business laws designed to help small business owners protect their legal interest in a venture. However, those legalities may be the last thing on an entrepreneur’s mind, as the details of making the business a success may occupy all of an individual’s time.
Yet it would be a mistake to ignore the legal aspect of business operations, even when a small business is just getting off the ground. A proactive approach might include consulting with an attorney to make sure that an enforceable partnership agreement -- signed by all parties -- has been put to paper.
An attorney can also provide counsel on matters that may impact a small business’ long-term health. Although problems many not immediately manifest, disputes can arise several years after a business’ formation when it comes time to renegotiate leases or contracts with vendors. An attorney can provide valuable assistance in negotiating those disputes.
For example, owners may be uncertain whether to rent or purchase space for their operations. Although renting may save money in the short-term, an attorney might recommend purchasing property as a precaution against unfavorable lease renegotiations, as well as for the tax savings that may come from ownership or investing in depreciable property or assets.
An attorney that focuses on business litigation also knows that a lease obligation might hinder an owner’s ability to sell the company. Said another way, the cost of the lease might decrease a company’s value in the eyes of a prospective buyer. If a startup small business also borrowed from lenders, a business attorney can also review those agreements for potentially unfavorable terms.
Related post: “In business dealings, it’s a small world, after all,” Oct. 25, 2014
Source: Huffington Post, “5 Common Mistakes Small Business Owners Make,” David S. Bunton, Sept. 24, 2014