“Business Partnership”, is a term that seems completely innocent. Seemingly, two friends could form a successful business with nothing but their ambition and a little luck. Unfortunately, that’s a fantasy that often doesn’t come true. Instead, business partnerships are about more than simply splitting everything equally. In reality, a business partnership is a binding legal contract between both partners in a business. Certain obligations and responsibilities are carried with the contract under law, but can also be catered to fit specific needs. Thus, when creating legal contracts to specify the kind of business partnership to be formed, it’s extremely important to be acquainted with the benefits and risks of doing so.

Contract software is one tool that can be tremendously useful when forming a partnership. When designed by experienced lawyers, contract software can quickly and easily create a business partnership arrangement that fits all your needs.

The following is a list of ten tips that can help you with legal contracts and contract software to form the foundation of your business partnership. Read them, reflect on them, and let them be your guide to finding out more about the creation of business partnerships. They could make the experience less worrisome and more rewarding.

1. Know what you're getting into with partnerships. As referenced above, partnerships are about more than friends and profits. Business partnerships instead are a legal entity that involves legal responsibilities and obligations.

Furthermore, liability can become a major part of the equation within business partnerships. Even when there is no mistake on your behalf, it’s possible to still be sued, and lose a lot of money in the process. Sorting out liability is thus crucial in partnership arrangements.

2. The more specific, the better. Entering into a business arrangement of any kind is a type of contract, and partnerships act in the same manner. Even when nothing is written, the law will still consider the arrangement a general business partnership, and treat it as such from a legal standpoint.

That's why it's always a good idea, under any business arrangement, to be as specific as possible throughout the contract. Lay out any and all possible terms in order to protect your interests whether it is a short or long term partnership.

3. Know the terms of liability in your partnership. When forming a partnership, determining liability is fundamental for the sake of the business.

Entering into a contractual arrangement, whether it’s with contract software or otherwise, should bid the question, “What happens to me as an individual partner if something goes wrong?”.

Liability clauses in business partnerships answer that question, and unless you know exactly the terms of liability in your arrangement, you could be exposed to financial risk.

4. Assess the pros and cons of limited partnerships. Essentially, limited partners are those brought in for financing purposes. Generally, they are not involved in the day-to-day business decisions of the partnership.

Limited partners don’t maintain the rights for decision making within the business because they carry limited liability in the partnership. However, if they operate as a general partner, they might be subject to the liability conditions of one if the company is sued.

Fine tuning your contract software to accommodate these concerns in your legal contracts is only a matter of engaging in good business practice.

5. Corporations can protect you from liability. As much as corporations are dreaded in today's business environment, they offer a variety of protection to partners and shareholders in ways that other forms of partnerships don't. The corporation is a legal contract that acts as an umbrella when it comes to issues like liability. Thus, many find corporations beneficial for reasons of liability.

6. Consider the possibility of a limited liability partnership. When forming your partnership, consider contract software which can accommodate the creation of a legal contract known as a limited liability partnership, or LLC (Limited Liability Corporation).

The limited liability partnership is a hybrid form of business arrangement that contains extra protections from liability. LLC’s are similar to corporations, but maintain enhanced tax incentives. Unfortunately, not all jurisdictions or professions allow these. Limited liability partnerships can be extremely beneficial to a variety of small businesses.

7. Don't be afraid to mold and shape the terms of your partnership. Contract software is capable of producing a standard contract for business partnerships, but you don't have to be married to it.

Contract software can easily be manipulated to set diverse terms throughout the business partnership. Contracts can also always be amended after creating them. Thus, nothing is set in stone.

8. Protect your interests in the formation of a partnership. Creating a legal contract to form a business partnership can be extremely involved. Therefore, finding a lawyer that can guide you through the legal issues of the contract may be beneficial.

Contract software can be easily used to create partnerships; however, it’s always worthwhile to have a professional check over the legal work. Lawyers are not only able to form an entire contract, but they are also able to look over any legal contracts that are created Online. Because there are so many options, you should research those best suited to your type of partnership.

9. Be careful. Creating and writing business partnerships carry certain legal and contractual obligations. These become especially apparent if you were in part responsible for writing the contract with contract software.

If involved in writing any part of the contract, parties in court have the possibility of arguing that you legally carry more responsibilities when the contract is violated or breached. Thus, always be cautious.

10. Know your options. Business partnerships hold a plethora of options to choose from. Various business partnerships bear particular degrees of liability, and change throughout different legal jurisdictions.

When writing legal contracts, or using contract software in writing legal contracts, keep in mind that not all authorities hold the same law for legal issues. Knowing what your options are, is particularly imperative than with contracts, business partnerships, and liability arrangements. The more you know, the better the chances of protecting your interests will be.

Author's Bio: 

James Cochran is the founder of ContractEdge, a provider of legal contracts and agreements designed specifically for IT professionals and contractors.