# The Ultimate Beginner’s Guide to Creating a Solid Business Partnership Contract
When entering into a business partnership, it’s essential to establish a comprehensive partnership contract that outlines all aspects of the partnership. To ensure a successful and clear partnership, it’s crucial to include the following 10 elements in the partnership contract:
## Voting Rights Structure
– Clearly define the voting rights structure for any management decision.
– Specify the percentage of voting rights for each partner based on their dedicated functions.
## Clear Roles, Responsibilities, and Contributions
– Outline each partner’s roles, responsibilities, and contributions in the partnership contract.
– Avoid miscommunications and conflicts by clearly defining each partner’s expectations.
## Dispute Resolution Clause
– Specify a dispute resolution mechanism in the partnership contract to manage conflicts.
– Choose mediation, arbitration, or legal action to save time and prevent costly court proceedings.
## Crisis Management Plan
– Include a crisis management plan in the partnership contract to address potential challenges.
– Avoid leaving crisis management details until a crisis emerges to ensure a well-prepared approach.
## Profit Split Explanation
– Clearly specify how profits will be split between the partners in the partnership contract.
– Define whether profits will be distributed proportionally to revenue contribution or evenly.
## List of Shared Resources
– Add a list of shared resources that will be utilized by both partners in the partnership contract.
– Discuss and agree on the sharing of information, equipment, and human resources to avoid potential conflicts.
## Non-Compete Clause
– Include a non-compete clause in the partnership contract to prevent partners from using company secrets for competing ventures.
– Protect the partnership’s work and assets by implementing a non-compete agreement.
## Metrics for Goal Measurement
– Define the metrics used to measure business goals for each partner in the partnership contract.
– Establish clear expectations to improve business performance and ensure mutual understanding between partners.
## Succession Plan
– Cover the topic of succession in the partnership contract to address potential scenarios and responsibilities.
– Ensure clarity on who takes over in the event of a partner failing to meet commitments or facing personal issues.
## Exit Strategy
– Establish an exit strategy in the partnership contract to handle assets and debts in case of a partnership dissolution.
– Ensure clarity and preparation for potential rough patches in the partnership.
By incorporating these 10 elements into a partnership contract, business partners can establish a solid foundation for their collaboration and mitigate potential challenges. Planning ahead and clearly defining the terms of the partnership can lead to a successful and fruitful business relationship.
For more tips on creating a successful business partnership, visit [Young Entrepreneur Council](https://yec.co/).
