Another Vote for Getting a Buy-Sell Agreement

Jeff Dennis has a column, Lessons from the edge on Canadian Business Online that includes excerpts from his book of the same name. He describes the book as "a chronicle of entrepreneurs who lost or almost lost their companies, and what they learned in the process...."

The third one has relevance for this blog:

"3. Partners — Get it in Writing

Partnerships are the area most fraught with danger for entrepreneurs. We take on partners because we require additional skills, contacts or capital. However, partnerships are just like marriages: easy to get into, messy to get out of. As a result, it’s critical to have the commercial equivalent of a prenuptial agreement in place — namely, a partnership or shareholders’ agreement."

Forgoing a shareholders’ agreement is an all too common and critical error made more painful by how easy it is to get one — hire a lawyer to map out a contract that reflects you and your partners’ mutual understanding of the partnership.

To read more on this see my post here and here. And for limited liability companies, see this post.

Of course, you might want to learn the lesson the hard way.