If you`re starting a business with a partner, one important thing to consider is a business prenuptial agreement. Just like a marriage prenup, a business prenup outlines the terms of the partnership and what happens in the event of a dissolution.
Here`s a sample business prenuptial agreement:
This Business Prenuptial Agreement (the “Agreement”) is made and entered into on [Date], by and between [Partner 1 Name] (“Partner 1”) and [Partner 2 Name] (“Partner 2”).
Purpose of the Agreement
The purpose of this Agreement is to outline the terms of the partnership between Partner 1 and Partner 2 for the business known as [Business Name] (“the Business”).
Ownership and Responsibilities
Partner 1 and Partner 2 will each own [Percentage] of the Business. Partner 1 will be responsible for [Responsibilities], while Partner 2 will be responsible for [Responsibilities].
Finances
Partner 1 and Partner 2 will each contribute [Amount] to the initial capital of the Business. All profits and losses of the Business will be shared equally between Partner 1 and Partner 2.
In the event of the dissolution of the partnership, all assets and liabilities of the Business will be distributed equally between Partner 1 and Partner 2. If either Partner wishes to withdraw from the partnership, they must provide [Notice Period] days notice to the other Partner.
Confidentiality and Non-Disclosure
Partner 1 and Partner 2 agree to keep all confidential information of the Business confidential and not disclose it to any third parties. This includes but is not limited to customer lists, financial information, and trade secrets.
Dispute Resolution
In the event of any dispute arising from this Agreement, the parties agree to first attempt to resolve the dispute through mediation. If mediation is unsuccessful, the parties agree to submit the dispute to binding arbitration in accordance with the rules of the American Arbitration Association.
Governing Law
This Agreement shall be governed by and construed in accordance with the laws of the state of [State].
Entire Agreement
This Agreement constitutes the entire agreement between the parties and supersedes all prior negotiations, understandings, and agreements between the parties.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date and year first above written.
[Partner 1 Name]
[Partner 2 Name]
As you can see, a business prenuptial agreement is an important document to have when starting a partnership. It can help prevent disputes and ensure a smooth dissolution in the event that the partnership ends. Be sure to consult with a legal professional to ensure that your prenup meets all legal requirements in your state.