Fill in your details below and one of our friendly consultants will call you back as soon as possible.
  • This field is for validation purposes and should be left unchanged.

Follow us on Twitter

  • RT  @FMFSouthAfrica : Solzhenitsyn: Human beings … If they are free, they are not equal. And if they are equal, they are not free. 1 day ago
  • RT  @SBCCapeTown : Are you struggling to get your #startup off the ground. Do you wish you could just Accelerate your way to the top? #sbcCap… 3 days ago
  •  @SobekComms   @NewGenVF   @SObedih  Talk to  @YueDiligence  for assistance, they’re an African online, Due Diligence platf… https://t.co/8yJkuzTGhY 3 days ago
  • RT  @TheGGDA : Calling all start-ups! eKasiLab Mabopane Activation – Start Up Weekend is here!  @InnovHub  &  @GautengDED  are bringing the bes… 3 days ago
  • RT  @MESTAfrica : 🇬🇭 Interested in learning how to #code? Apply for  @moringaschool  coding bootcamp courses, held at #MESTAccra campus startin… 3 days ago
  • RT  @TyronneNel : #SME Advice - Your entrepreneurial journey will be filled with many people who are either hindering or helping you. Find ou… 3 days ago
  •  @colin_timmis   @OCFOza   @mokubete  Unfortunately #SME’s still see accounting as a grudge purchase, forced upon them by… https://t.co/ysmZKqkBAh 3 days ago
  • RT  @TheLaunchLab : Almost time! Check out this Meetup: From Spin-out to Scale-up https://t.co/yhgGERXb98 #Meetup #Stellenbosch via  @Meetup  #… 3 days ago
  • #ThursdayThought - Oh Boy, if ever there was a day we needed coffee. This is it!! https://t.co/hBGYol0QZ2 3 days ago
  •  @yamanburak   @StartupGrind   @dreamhustlecode  Oh! to have had internet in 1989!! 4 days ago
  • RT  @VentureCentral : Are you a Business Owner needing finance? Go to https://t.co/vD6j3Kqy2w where you will be linked with all the lenders a… 4 days ago
  • RT  @SBCCapeTown : Calling all #startups! Interested in joining a #FastTrack? Cape Town FastTrack 19Feb /Johannesburg FastTrack 21 Feb Cut ou… 4 days ago
  • #WednesdayWisdom - Do what you love and you'll never feel like you've worked a day in your life! https://t.co/x2qk9jCYfs 4 days ago
  • RT  @PayFast : If you have an NPO in need of a website then apply for the  @WPCapeTown  do_action Charity Hackathon in Cape Town! WordPress exp… 5 days ago
  • #TuesdayTip - Spend at least 1 day per week working ON your business, if not, you'll spend all your time working IN… https://t.co/Hfct9TV7cd 5 days ago
  • RT  @ABANAngels : “In Silicon Valley a VC might have $50 million they want to invest while here in Africa a VC may only have $50 000 to inves… 5 days ago
  • RT  @CatherineHYoung : Calling all SA companies with black ownership of 51% or more, between turnover of R10mil and R50mil to apply for a pro… 5 days ago
  • RT  @SAINE_SA :  @InnovHub  is calling Entrepreneurs with fresh ideas in ICT, Mobile Tech, Smart Manufacturing & Energy and Green. https://t.co… 6 days ago
  • RT  @KnifeCap : One can sense that it is Tax Season by the rate at which we are issuing s12J VCC Investor Certificates to investors in our  @K … 6 days ago
  • #MondayMotivation - Who can't be excieted about Monday's? A great opportunity to reset your objectives. https://t.co/uTpvJz0uiL 6 days ago
 In News

Partners and your businessSo, you have been operating for a while now and are considering bringing on a partner because you realise that you are unable to achieve your objectives on your own. The problem is, you don’t know where to start and after all the horror stories you have heard, you are a little hesitant to say the least.

Well the good news is, providing you do it correctly, bringing on a partner should be no more difficult than concluding a sales contract with a client.

Most often, we bring on business partners because we need the additional capital to grow our businesses or because they possess a skill we need but cannot afford to hire in the market place.

When looking for somebody who meets your requirements, it is important to ensure that you get along with them on every level because your individual personalities will play a large part in how the business is run, clashing personalities are very often the cause of many business failures.

Once you have found the person to you feel is most suitable for you and your business, it is important for you to prepare a shareholder (Companies) or membership (Closed Corporations) agreement. This step is very important and should not be overlooked as it will be very difficult to prepare one after the fact.

In preparing your agreement it is important to write down all the potential issues both of you feel might get in the way of running the business. Below is a list of some of the more common issues we have had to deal with:

Shareholders – It is important to be clear who owns the shares of the business as the agreement is between these parties and not necessarily individuals.

Ownership Percentage – Be very clear as to what percentage each shareholder owns?

Object of the Business – You need to state what the business does.

Loan Accounts – How are there to be treated in the business?

Death of a partner – How will the shares be treated if you or your partner die?

Key Man Insurance – Will the business be taking out insurance on the lives of the partners?

Conflict of Interest – it is important to ensure your partner is dedicated to the business and not pursuing other interests.

Directors & Chairman – You need to be clear as to who can appoint Directors and who will be the Chairman.

Deadlock – It is important to stipulate what course of action will be taken if the Shareholders find themselves deadlocked on an issue.

Dividends – What percentage of the profit will be paid out as dividends?

While the above list does not cover every eventuality, it is a good place to start when you are having your discussions. Good luck.

Recommended Posts

Leave a Comment

Start typing and press Enter to search

How is it possible that you are making profits but do not have any money in the bank?What is a legal tax invoice?