When Friend #1 starts playing guitar, Friend has to #2 make statements of support like, “Now we groove!” “You`re the one doing this, buddy!” and “You`re doing even better than Blues Traveler!” Going into business with a friend can seem like an ideal business. After all, we know each other well and we have a sense of mutual trust. The realities of running a small business, or even working on a short-term project, can sometimes test even the closest friendships. In order not to harm your friendship or your business, you develop a contract that defines expectations, rights and responsibilities for both parties. Form a business partnership through your local business licensing organization. This formally establishes your partnership and makes it more business-like than feeling friendly-like. Individual companies and partnerships do not enjoy the same financial and legal protection as registered businesses, which means that you and your friend are personally responsible for the company`s finances. This requires a considerable level of mutual trust, so don`t let personal feelings influence the way you manage business finances. Consider using a neutral third party to oversee financial agreements so they don`t cross the border from one transaction to another and harm your friendship. A registered business enjoys financial and legal protection that an individual company or a company does not have. This means that with a partnership, you and your friend are personally responsible for the debts incurred for the company. Take your draft contract for formal confirmation to a notary, then pass it to a lawyer who specializes in entry — preferably someone who has no prior relationship with you or your friend. The lawyer can identify possible problematic areas in the project and develop a legally binding contract that has more influence than a notarized certified document.
If you risk your personal wealth through a partnership with a friend, a lot of trust is needed on both sides. It may be important to set aside your personal feelings about friendship so that they do not affect the way business finances are managed. One option is to call on a neutral third party, who can monitor financial arrangements, so that he does not cause problems with the company and damages your friendship. If you are going to an adult business with a friend, it should always start with a detailed business plan. The business plan helps you navigate through important details about your business so that you are able to evaluate them correctly.