Running a business without any partnership is a very tough thing to do because you will need a lot of investment in the very first place. Some people are okay with using just their own investments and starting up with smaller business setups but this is not how you become a big name in business industry. There is no valuable firm in the world that is owned by one person only. A bigger venture needs a bigger investment and that comes from people who have the right kind of partnership ideas. It is as important for your business as anything else you could name.
But having a business partnership is not as beautiful thing as it may sound. You are allowing another person to have a say in your business and this might make things a bit sour in future. Many business partnerships end up in a very bitter way. In the beginning you would feel that you have found the best partner ever whom you can trust but later on things change. Putting a thorough thought into the whole process can save you from a lot of troubles later on. That is why we would suggest you to have a legal contract made with all the care that you can put in. You do not want to spoil your business later on just because you didn’t think it through properly.
That being said for all the businesses that you might want to invest in, offshore company formation in UAE is not that different either. You have to find a partner and set the terms and conditions in a way that it keeps on serving your interests. Especially when you are working in a foreign land it is better to know that the laws are unfamiliar to you and understanding everything would save you from extreme harm later on. Here are a few things that we would want to point out for you to understand before agreeing on doing a business with a partner.
Someone is going to have a say in all the workings of your business:
This might sound very easy to some people who think that they have found the most understanding partner of all. This is why people almost skip this aspect when getting ready for a business partnership. One thing is for sure, that everything is beautiful until a disagreement arises.
As soon as a disagreement is on the table you would start realizing that you do not want anyone to have this much say in your business but the time to think this through has gone. If you are having a partnership with someone then you have to be mentally ready for this to happen and keep the stamina to deal with such disagreements with grace without harming your business.
Understand how knowledgeable your partner is:
Business is not only just about the money. If a person has a lot of money to invest this does not make him a good business partner as well. There are a lot of people who have earned the money from different means and want to invest it without having any understanding of the business. They will start considering themselves knowledgeable just because they have the cash. This becomes a problem if your partner has the similar mentality. This means that they would come up with useless suggestions and you would not be able to say no because of the legal agreement that you have made.
You might need some consultancy from other experts about your business too. When it comes to business consultants UAE has a lot of very skillful people helping others to grow by taking a small fees. But an overconfident millionaire will not understand this. Instead of wasting your time and money on this friction of partners you should make sure that the person you are choosing as your partner deserves the position or not. Move smartly to have a more successful business.
Things that you and your partner should talk about and negotiate:
After understanding that business is a very difficult thing to manage if you do not have harmony among the team and how partnership is going to affect this harmony, let us talk about the things that you have to discuss with your partner before you get started with the things. If you do not find yourself comfortable with any of the terms it is better to talk beforehand rather than thinking about them under a legal obligation.
- The first thing is the percentage of ownership and the contributions that both parties are going to make. This is something that most people usually decide beforehand and does not become an issue later in the workings of the company. But if you do not have decided these things, it is better to start already.
- Then you have to decide how you are going to decide the profits and losses and who is going to get the part. These things should be very clear otherwise you would have to halt your progress in the middle.
- The most important thing to know is that who has the power to make decisions. This is a very important aspect that most people miss in the beginning. And probably this is the reason behind the failure of many businesses. People do not have same opinions at time and if both the partners have equal say in everything then this would result in a lot of friction and problems for the business.
- Finally it is important to decide the terms and conditions of exit of a partner from the firm. No matter how good relationship you have with your partner you have to deal any business partnership just like a marriage. You know that you want to stay together but the terms and conditions of the exit and end must be decided already. If you are ready for everything bad that might come you will not face any bad surprises later.