The agreement for your New Jersey partnership may have a section focusing on what will happen if a partner wants to leave or dies. But does it address what happens when you want to add someone to your business?
As your business grows, you may want to add more partners or replace a partner who left. Before doing so, you may want to take the time to carefully consider whether the person you have in mind would help or hinder your partnership's efforts.
Making sure a new partner would add value to the partnership
While you may need a new partner in order to put new life into your company, you still need to carefully evaluate what a particular person will add to your partnership. Once a person joins the group, it could prove difficult to remove him or her if things don't work out. For this reason, you may want to carefully consider the following before making it official:
- What role will the new partner play? Identify what your partnership needs before considering an individual, since each person needs to add unique value that contributes to the success of your operations.
- Does the potential partner share your vision for the company? Everyone needs to understand where the company is going and agree on how it will get there for the partnership to work.
- Do you need a general partner who will have a larger role in operations, or a limited partner who provides capital and is not involved in operations? Answering this question will often determine the type of person you entertain as a partner.
- Consider the strengths, weaknesses, threats and opportunities a particular individual would bring to your partnership. Even though a person may bring significant capital to your business, you may want to consider what else that person brings to the table before making a decision.
- Even though you want to focus on the positive during your negotiations with a potential partner, you also need to address what happens if the relationship doesn't work out. If you already have a process in place for an existing partner, make sure the new partner understands it and agrees with it.
Once you decide to add a new partner, you will need to cement this new relationship in writing. Doing so may require some negotiations first. Even though you may be eager to get through this process, it pays to slow down some and make sure that you keep the future of the partnership in mind as you move forward. A good contract that protects your rights is essential.