TNNWC Publications And Informational Products Division publishes The National Networker (TNNWC) Weekly Newsletter and The BLUE TUESDAY Report especially for entrepreneurs and early-stage venturers; free weekly subscriptions to these informative publications are available online to all entrepreneurial Members of TNNWC.

Membership in TNNWC is free (it's automatic for any subscriber to any TNNWC Publication) and available at our website. When you arrive there, just click on any of the JOIN US or BECOME a MEMBER buttons or links.

Friday, August 12, 2011

Sign On The Dotted Line - Then We Can Become Business Partners | CEO SPACE

"A business partnership is like a marriage..."

Starting a business can be exciting. Some persons are able to start and operate a business on their own. Others, for various reasons, launch a business with friends, family members, colleagues or associates.

Regardless of whether you may partner with your mother, brother, neighbor or essentially a stranger, memorialize your understanding in writing. Have partners been successful in business without an agreement? The answer is "Yes." Is it advisable to do so? The answer is "No." A written document significantly minimizes misunderstandings among partners and, if partners ultimately decide to go their separate ways, the transition can be much smoother.

A "Shareholder Agreement" (as it's generally called when a corporation is formed) or a "Partner Agreement" (in the context of a general or limited partnership). Both terms are used interchangeably in this article.

1. Identify the owners, their respective ownership percentage and financial expectations. Clearly set forth the name of each of the shareholders/partners and the number of shares or interest each owns.

Surprisingly, many businesses operate for years without a stock certificate (or member certificate in the of a limited liability company) ever being issued. What could happen is that one partner may assume he/she has an equal ownership in the business while another partner believes that he/she owns a majority of the business. Also, be clear as to the amount of money each partner is expected to contribute to the business initially and on a going-forward basis, and how profits and losses will be allocated.

2. Management Issues. In certain businesses, particularly newly formed, small businesses the owners participate in its daily management. It therefore makes sense to outline the duties and responsibilities of each partner so that all expectations are known.

3. Decide if ownership interests can be transferred to third parties. This is particularly important for small businesses which are "closely held" (i.e., has no more than five owners). Without this understanding, one partner may transfer his/her interest in the company to a spouse, his best friend or some stranger, for that matter. The other partners may not want to be in business with someone they don't know, like or one with a different business philosophy. A shareholder agreement may provide that a transfer of stock or ownership interest is not permitted without the consent of the other partners, and may provide that the other partners or the entity may have the first right to buy the shares or interests that a partner wishes to sell or transfer (i.e., a right of first refusal).

4. The effect that the death, disability or retirement of a partner may have on the business. If a partner becomes ill for an extended period of time or retires, chances are he/she ay no longer contribute to the business or its operation. An agreement may be structured to provide that such partner's shares or ownership interest is to be bought back by the company or offered to the other partners.

5. Treatment of confidential information. Owners of a business often obtain access to confidential, nonpublic information such as inventions, costumer information or marketing strategies. If a partner departs from the business, he may use this confidential information to his advantage unless an agreement is signed precluding that partner from doing so. The shareholder agreement should include a clause which requires each partner to keep all nonpublic business information confidential and not to divulge it to any third party without the company's, he or she should be required to return all confidential information to the company.

6. Restrictions against non-competition Avoid any misunderstanding or confusion as to whether a partner can enter into a similar business if he or she were to leave the company. A non-compete clause in a shareholder agreement can provide that a partner cannot directly or indirectly compete in the same type of business within a certain mile radius of the company's location.

These are a few key terms relating to a partner agreement, but by no means a comprehensive list. What's important to remember is that whatever terms the partners agree to, such terms need to be in writing and signed by all partners. In many aspects, a business partnership is like a marriage good communication is key. The failure to effectively communicate and enter into agreements that all parties can live with can lead to a messy divorce.

This article is not intended to provide legal advice. Always consult an attorney for legal advice for your particular situation.


Founded by Berny Dohrmann over 20 years ago, CEO Space is a private entrepreneurial business club with an environment that we created for people to be able to get quick results with their business through networking, education, and resources. Berny Dohrmann recently won the 2011 Inpex Ambassador Award for tireless contribution to inventors worldwide. For a one-time tuition payment Entrepreneurs receive a Lifetime membership and one free class, as well as a lifetime of mentoring, contacts; resources, and most of all a lifetime of support for you and your business as you grow. CEO Space is certified for Continuing Education credits. You can learn about Contracts, Government Contracts, I.T., Business Planning, Licensing, Marketing, Transformational Leadership and other topics at CEO Space.

Jacqueline J. Warner, Esq. is a seasoned attorney at the national law firm of Hinman, Howard & Kattell, LLP, in White Plains, New York with over 19 years of experience with corporate, securities, real estate, and estate planning and administration matters. Attorney Warner regularly advises clients on starting and growing their business, raising capital via private offerings and negotiating a wide array of contracts. She is the author and publisher of a book entitled The Mini Legal Toolbox for Entrepreneurs and Small Business Owners and a soon to be released second book in the The Mini Legal Toolbox series entitled Raising Capital for Your Business; Understanding Private Offerings.

The Mini Legal Toolbox Website -
Jackie The Legal Diva -

Article Source:,_Esq
Article Source:

For more information on CEO Space please visit or call CEO Space at 256.850.4700.

~ CEO Space Mall –
~ Blog – and
~ CEO Space Twitter page –!/ceospace
~ CEO Space Sovereign Nations –
~ CEO Space Super Teaching –

For complete tactical and strategic business planning, marketing, media, lead-generation, technological and capital resources, scalable solutions and tools to support every entrepreneurial start-up, young enterprise, small- to medium-sized business and emerging high-growth company, talk to the Advisors and Experts at TNNWC Group, LLC.

We are a collaborative entrepreneurial, creative organization offering you hands-on, personalized assistance in every aspect of achieving your monetization, profitability and financial sustainability objectives, domestically and globally.

We don’t just “coach” you or offer you pre-packaged, push-button solutions – we listen to you, analyze your exact needs, and work within your scale of operations and your budget to: (1) create your optimal tool kit , and (2) work as your partner (with our sleeves rolled up) to implement your plan by supporting you in the most efficient and productive use of every tool.

Visit our website, which is located at

To receive your Free Subscription to our critically- acclaimed business newsletters, publications, information bulletins and alerts, simply join us as a Member. Two of our most widely-read publications include The National Networker (TNNWC) Weekly Newsletter, and The BLUE TUESDAY Report. Every Subscriber automatically receives Free Membership.

Membership will grant you access to our unique suite of business planning, business-building, business promotion, business cost-reduction, business capitalization and strategic planning services, as well as entry to our expert management consulting services. These benefits are unequalled anywhere.

Just go to our home page, and click on the “JOIN US” button. Find out about what WE can do for YOUR growing enterprise -- we are recognized advocates, champions, thought-leaders, writers and keynote speakers on such timely subjects as social networking and relationship-building, traffic -building, social media buzz, branding, developing international trading and joint venture relationships -- and structuring and obtaining alternative forms of capitalization. We are on top of every significant business, regulatory, technological, social and consumer trend worldwide.

At TNNWC, we have a specific orientation: We Solve Problems. We Help Our Clients To Achieve Their Goals And Objectives. Prosperity. Peace. Collaboration. Sustainable Solutions For Continuous Growth™.

Subscribe. Join Us. Visit Us.

You can access our free supplemental RSS FEED by clicking *HERE*

This blog post format is Copyright © Douglas E. Castle, with all rights reserved.

About Douglas E. Castle

Forward/Share This Article With Colleagues And Social Media:

No comments:

Blog Archive

BNI News Feed

The Emergence of The Relationship Economy

The Emergence of The Relationship Economy
The Emergence of the Relationship Economy features TNNWC Founder, Adam J. Kovitz as a contributing author and contains some of his early work on The Laws of Relationship Capital. The book is available in hardcopy and e-book formats. With a forward written by Doc Searls (of Cluetrain Manifesto fame), it is considered a "must read" for anyone responsible for the strategic direction of their business. If you would like to purchase your own copy, please click the image above.


Site Credits:

Featured in Alltop
ALLTOP Business
News Wire. HOT.
Cool Javascript codes for websites  Fabulous Free Calendars

Create FREE graphics at