Whether you're in the process of starting a business, or you're looking to bring on a partner to expand your current company, choosing the right partner for your business is an important decision that should not be taken lightly. Being in business with someone can be a difficult undertaking, and having a partner with a different skill set can provide strengths not available within your own team. But it's important to keep in mind that forming a business partnership also requires fulfilling certain legal requirements that can add complexity to the process. Before entering into a business partnership in Chicago, here are the five things to consider that will ensure your partnership is successful and helpful.

1. Understand Your Immediate Needs and Goals

Before you start looking for a business partner, it's important to understand your business objectives and the skills that need to be brought in to meet them. Identifying what you're seeking in a partner can help guide you when looking for the most qualified candidate. Even if you already have someone in mind, it's still important to have a clear sense of the direction you want the business to take and the skills that a partner should bring to the table.

2. Learn About Your Prospective Partner

The next step is to find out more about the prospective partner. Be sure to ask them about their experience and background, previous partnerships, and why they think they would be an asset to your company. If the prospect has a portfolio of their past work, it can help you determine if they are the right fit for your business. Meeting several prospects will also give you an idea of their skills and experience and help you compare and contrast.

3. Decide on a Legal Structure

Once you have identified a partner with the right skills, it's important to decide on a legal structure for the partnership. A Sole Proprietorship, or an unincorporated business with a single owner, means that all profits and losses are the responsibility of the owner, not the business itself. Other forms of business structure, such as a Limited Liability Company (LLC), or a corporation, provide a certain level of personal liability protection for the owners. In Chicago, there are specific rules and regulations that should be followed when setting up a business partnership. It is important to work with an experienced attorney who understand local regulations and provide the right advice for your situation.

4. Set Up a Partnership Agreement

A partnership agreement is an essential document that describes the terms and conditions of the partnership. The agreement should include information such as the terms of the share of profits and losses, the duties and rights of each partner, relevant financial information, and buy-sell and exit strategies. Having a well-drafted agreement will help protect all parties involved in the partnership and make the partnership more efficient.

5. Choose the Right Lawyer

When it comes to partnership agreements, small details can make a big difference, so it is essential to find a lawyer who is knowledgeable about local regulations. An experienced attorney can help guide you through the process, provide advice on the best legal structure for your business, and help ensure that the agreement is comprehensive and beneficial to all partners. UpCounsel provides a network of experienced and qualified attorneys in Chicago who have the necessary knowledge and experience to help with any business partnership needs.


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