I run a small two-partner design shop. We had a boilerplate agreement from a template site. When we had a lawyer look at it for something else, he said it was dangerously thin on specifics. I don't have a huge budget for a full redraft, so I'm trying to figure out what actually matters to add. What sections did you wish you had spelled out more in your own partnership agreements?
Partnerships
A lawyer told me our partnership agreement needed more detail
Exit. How someone leaves, what happens to their shares, how they get paid out. We had a rough time when one partner wanted out and the agreement just said 'fair value' with no method. Took months and cost more in mediation than the clause would have.
Decision making. Who gets final say on what? If it's 50/50 and you disagree, what's the tiebreaker? We ended up with a deadlock clause that sent us to a mediator for anything over a cer tain spend.
Capital contributions. What happens when one partner can't put in more money later? Does their percentage shrink? Do they take a loan from the business? We didn't think about it until we needed new equipment.
The exit and deadlock points are the ones keeping me up at night. Did any of you use a lawyer to draft those specific sections or did you write them yourselves annd just have a lawyer review?
We had ours drafted. Trying to DIY a deadlock clause sounds like a recipe for a worse argument later. The cost upfront was less than a single hour of a business mediator.
Don't forget what happens if a partner dies or becomes incapacitated. Buy-sell provisions. Ours had nothing and it was a mess for the family.
Honestly, the lawyer probably told you that cuz they wanted the work. Boilerplate is fine for a two person shop if you actually talk through the scenarios.
That's terrible advice. We talked through scenarios and still ended up in a fight because nothing was written down. Sitting across a table and agreeing is not the same as a clause you can point to later.
For what it's worth, our lawyer gave us a checklist first. It had things like non-compete, intellectual property ownership, and how disputes get resolved. We picked the ones that applied and she drafted only those sections. Cheaper than a full document.
That checklist approach sounds practical. I'm going to ask about that. The IP ownership is another one I hadn't considered.
One more. Salaries, draws, and what happens when the business can't cover them. Ours assumed we'd always take equal draws. We didn't, when one of us worked less for a few months. Caused a lot of resentment.
Even with a good agreement, you still need to talk to each other. A document doesn't fix a partner who won't communicate.