Advice on setting up a business partnership

I am in the process of setting up a business, for the moment it will be online based and then hopefully if all goes well i can think of expanding to a premsies, due to the nature of the business i have been thinking that having a partner would be a good move, the work will be very hands on especially at the beginning and i don't know if i could realistically manage everything on my own, i am not really looking to hire someone to work for me, as i wouldn't be able to pay them straight away until things start to take off so i would be looking for someone who would be willing to take a risk with me, the risk would not be such a financial risk, as i already have purchsed most of the material that i will need to start, and then will continue buying as i need it.

I would just like some advice from anyone who has been or is in a similar position, and to get their take on things.

1. How do i find the right person, someone i can trust, and be sure that they won't screw me over, and that they will be as dedicated to the business as me?

2. What are the biggest risks to me?

3. Is there anyway of having a fair 50/50 partnership, which will still allow for me to have more protection and responsibility, given that it was my business plan, to be sure that i don't get screwed over and have my business destroyed.

4. Are there any specific leagal channels i should go through, when making a partnership?

Any advice is greatly appreciated.

Many Thanks
Sarah

The ideal partner is someone who complements you or your business, and brings something to the table that you lack to fulfil your business plan. Examples of what they could bring might be money, skills, or time. If you don't have a plan, or don't know what you need, think carefully about your business, or even your need for a partner. The risks are clear. The wrong partner could kill your business or take all your money, to name just two possibilities. You need to draw up a formal contract specifying what you both contribute to the business, what you get out of it, and how either or both of you can depart the contract. You need the help of a Steuerberater, Lawyer or both. Functionally, in Germany, you'll probably set up a "Gesellschaft bürgerlichen Rechts" (GbR) which is a formal business partnership and legal trading entity, but has no limitation of liability (unlike a GmbH) so if the business collapses owing lots of money your creditors can take the shirt off (both your) back(s) and leave you in the gutter. If this happens after your partner has done a runner, then you could be in big trouble. Bear in mind too the circumstances that may arise if either of you cannot fulfil your role in the company (e.g. due to illness) and how that might affect your business or future, and plan accordingly.

Hi Sarah,

As Yorkshirelad said you need to draw up a contract with the help of your tax consultant or lawyer. My tax consultant gave us some excellent advice.

One thing we have in our contract is the following. Each month we invoice our company for the work we've done. Then we look at the invoices and decide if they are fair or not. It's an excellent way of ensuring each partner does his fair share of the work.

Also you should split up the tasks in the company. So each partner knows what he/she is responsible for. Make sure, you are in charge of the books. The person in control of finances has the real power.

Trust is the key in a partnership. I'm lucky that I'm in partnership with people I trust. If you don't know the person you really need to get the contract between the partners right.

Good luck.


It's the same question you'll find on dating sites.

Thanks for the advice

First find the partner then discuss the structure. If you have someone full of energy and willing ot put ideas and time in but no cash, then its a different adventure. You sticking point will be the "ownership" conflict issues. They need to be sorted out, and agreed apon. The usual way for an equal but not quiet so is 49-51%. Be aware if you want someone to come in and give their heart and soul to this business on a 50/50, you turning around and saying "but it was my business plan" is not going to be very constructive.

Definitely, don't go looking for a business partner in a public forum.