Forming a small business can be extremely profitable. A number of large corporations were started by entrepreneurs who founded small businesses and allowed them to grow. During this growth; however, certain legal problems may arise. It is important for business owners to know about these common legal mistakes, as many of these issues may have been prevented had they took the proper precautions.
One mistake business owners often make involves the creation of the initial blueprint of the company. In order to write a cohesive business plan, all partners should fully understand what is involved and agree to all of the factors. These factors may include the following:
- The overall goal and mission of the company.
- The exact roles and responsibilities of each partner.
- The percentage of the company owed to each partner.
- The amount of time each partner is expected to invest in the company.
- Who is responsible for making daily decisions regarding the company?
Partners may also want to discuss what will happen if one of the partners leaves the company. While some business partners are paid a salary based upon sales or stocks in the company, others may take wages or not take any payment at all. Issues may also arise if one partner fails to meet up to his or her expectations within the company. The business agreement may want to address this situation and give specific instruction on how to overturn a partner if a problem should arise. Finally, there should be instructions as to how to sell the company if partners decide to do so.