Starting a Business with a Friend
If you are interested in starting a partnership, your most likely candidates for your partner are your close friends. That is because you spend a lot of time with each other; you almost know each other like you are the same flesh and blood.
However, friendship is not just the key for a successful partnership; it is how clear you and your friend have talked about the business.
It is a fact that most neophyte enterprises that spring up nowadays are managed by either close friends or closely related people. Most people would probably think that businesses that have been founded by partners that are friends first have the highest chances of success in the field. However, it’s not always true.
This, however, should not discourage you from starting a business with a friend. As long as you have a profitable idea and you invested some time to work a few things out you and your friend have a chance. The key is to know as much as possible about the things that you have to deal with.
Talk It Out With Your Partner
It is a fact that when two friends have a good business idea, they automatically consider starting a business. It is also true that, since they are friends, they tend to rush through the process in order to put their ideas into reality and fail to work out the details at the beginning. This is where most partnerships break down; problems arise later on that the partners are unable to deal with because they don’t have a clear comprehension on their individual roles in the business. They end up pointing fingers at each other when they should be mitigating the losses and, when it has become extreme; they dissolve the partnership with all that investment lost.
Find a Lawyer and Other Professional Advisors to Help You
Even though you may have a rudimentary knowledge of the legal considerations in starting a business, it can work to your advantage if you and your friend subscribe to the services of a lawyer that specializes in incorporating businesses. This helps greatly when drafting up a partner agreement as he can advise you on legal terms and jargon that you may not understand. It is not advisable to mess around with what you don’t understand when it comes to legal documents as you would certainly run into trouble later on.
Aside from the legal considerations, there are certain taxes that the partnership will be dealing with, and you need to know these taxes so you can account for them in coming up with your projected capital expenditures. The taxes do not just deal with cash property; the taxes also deal with non-cash properties such as intellectual property, and other intangible assets. There are professionals trained in this field who know exactly how you can calculate for the amount of tax you are accountable for when you start a business.