What would you do if your business partner suddenly announced he wanted to leave and sell his share of the business? How would you deal with a stalemate between partners over a crucial strategic decision?

When starting up a new business (whether as a partnership or a limited company), signing an agreement between partners or shareholders is not usually a business priority and is often overlooked. Partners may imagine a rosy picture of their ongoing working relationship and omit to address potential problems that may arise in the future.

A written agreement between partners at an early stage can avoid unnecessary complications setting out clear exit routes and procedures to follow. The document need not be complex, but should at least deal with disputes, transfer of shares and removal of capital from the business. Without such a document, it is more likely that the parties will have to turn to the courts for a resolution if an amicable arrangement cannot be reached.

If you would like any advice on business agreements or any other commercial matter, call us on 01491 572138.