How to protect my self legally while coming in a partnership?

508 votes

HI.

At first, you need to understand that if it is a technology based idea and you would need venture capital or seed funding going forward then you should incorporate a company and not partnership. If not, then you can very well g for partnership.

Now to answer your question. To safeguard yourself you should enter into a properly drafted partnership agreement to cover the roles & responsibility, accounting, share of capital (as in %). Make sure you keep the percentage sharing as 51%-49% as 50:50 creates a lot hassles in times of dispute regarding a decision. There are several other things which you need to take care and should be properly drafted like restrictions of roles, amount to be spent, joint account, litigation, liability etc. Get it drafted from a lawyer otherwise you would never be able to safeguard yourself in the best possible manner.

Advocate Kanishk Agarwal LawRato

755 votes

You need to get into a legally binding agreement & get him to sign that as well.
You can get an MOU signed immediately and then later you can go for Partnership Deed.
Also, in case you disclose your idea to anyone else, it is always advisable to sign a Non Disclosure Agreement with them so that they can neither use your idea nor disclose it to anyone else.

Advocate Atit Jain LawRato

578 votes

We should start by executing a proper partnership deed where the role of both the partners would be explained. Most of the clauses would depend on the type of business you have. Apart from that few important clauses would be registered office, capital investment, remuneration, profit and loss sharing, bank account, term of partnership, resolution of disputes etc. Kindly have this deed registered.

Advocate Shweta Sharma LawRato