Hello Genius, welcome back to another episode of the Own Your Genius podcast—the space where we encourage you to use your education and experiences to create dope businesses. I’m your host, Brand Attorney LaConya Murray, owner of Off the Mark IP Solutions and founder of MARKEDlegal.
We recently added a Partnership Agreement to the Contract Corner in MARKEDlegal. As I drafted the contract, I kept thinking of all of the ways a partnership could go wrong. If you’re new to business or even if you’ve been in business by yourself for awhile, partnerships can feel like a lifeline: someone to share the workload, bounce ideas off, and celebrate wins together. It’s tempting, right? But before you sign on the dotted line or shake hands at the coffee shop, let’s get real about what it takes to build a partnership that protects not just your business, but your peace of mind.
I get it. Stepping out of a secure job and into the world of entrepreneurship is exciting—and scary. You want allies. You want support. That’s totally normal. But partnerships are a lot like marriages: they work best when everyone’s on the same page from the start.
Drop the intro here
How Easy It Is to Form a Partnership
Did you know that becoming part of a partnership can happen much more easily than you might think? In fact, it can happen by accident! Legally, a partnership is just “an association of two or more persons to carry on as co-owners a business for profit.” This means that if you and someone else start running a business together to make money—even without any official paperwork—you could already be in a partnership according to the law.
Let’s break down what the word business really means in this context. “Business” doesn’t have to be a full-fledged company with employees, an office, or a website. It can be as simple as selling crafts at a local market, hosting workshops for a fee, or offering consulting services together. If you and another person are joining forces to provide a product or service and you expect to earn money, you’re engaging in a business activity—even if it feels informal or temporary.
Here’s what counts as a partnership:
- Two or more people: You and at least one other person agree to work together in a business.
- Co-ownership: Both of you share management and decisions about the business.
- Profit motive: You are trying to earn money, not just working for fun.
- Mutual agency: Each partner can make decisions and sign contracts that bind the whole partnership.
- Shared liability: All partners are responsible if the business owes money or is sued.
Notice that the “business” in all these points doesn’t require formal steps like filling out forms or registering with the government. It can happen simply through your actions or a verbal agreement (though it’s a good idea to write things down for your own protection).
So, if you and a friend start selling something together, organize a pop-up shop, or agree to run any money-making venture—even for a short time—you might have created a legal partnership without even realizing it! That’s why it’s important to know what makes a partnership, so you’re not caught off guard by the responsibilities that come with it.
Risks and Considerations
Before jumping into a partnership, pause and ask yourself a few tough questions: How well do you really know your partner’s work style and values? What happens if one of you wants out, or if you disagree on a big decision? The financial and emotional stakes can be high, especially when your livelihood—and your reputation—are on the line.
Due diligence isn’t just about numbers; it’s about understanding motivations, communication styles, and shared goals. A partnership can amplify your strengths—but it can also magnify your weaknesses.
Key Clauses in Partnership Agreements
So, how do you protect yourself from these potential pitfalls? The answer lies in preparation. One of the most effective ways to safeguard your interests and set clear expectations is by putting a solid partnership agreement in place. This agreement doesn’t just cover the legal basics—it serves as your roadmap for handling challenges, resolving disputes, and ensuring both partners know where they stand.
Here are some essential clauses every partnership agreement should include—no jargon, just the basics to keep you safe:
- Ownership Structure: Who owns what percentage of the business? Make it clear from day one.
- Roles and Responsibilities: Spell out who’s doing what. Ambiguity is the enemy of harmony.
- Decision-Making Process: How will you make major decisions? Is it unanimous, majority vote, or something else?
- Profit and Loss Sharing: How are earnings divided? What happens if the business takes a loss?
- Intellectual Property Ownership: Decide who owns any creations, trademarks, copyrights, or inventions developed during the partnership. Will the business hold these assets, or will they belong to individual partners? What if a partner entered the partnership with these assets, must they be transferred to the partnership? Clearly outlining how intellectual property is managed—and what happens if a partner leaves—can prevent major disputes down the road.
- Exit Strategy: If someone wants to leave, what’s the process? Can they sell their share? Is there a buyout clause?
- Dispute Resolution: If you disagree, how will you resolve it? Mediation, arbitration, or a trusted advisor?
These aren’t just boxes to tick—they’re your safety net. Putting them in writing might feel awkward at first, but it’s a sign of respect, not mistrust.
Protecting Your Interests
Protecting your interests means safeguarding both your personal and business assets. Don’t be afraid to talk openly about finances, intellectual property, and long-term vision. Schedule regular check-ins to review the agreement and your partnership’s health.
Transparent communication is your best defense. If something feels off, address it early. Remember, your business is an extension of your dreams—treat it with care.
Final Thoughts
If you’re standing at the edge of entrepreneurship, wondering whether to join forces or go solo, remember this: The right partnership can supercharge your growth, but the wrong one can drain your energy. Take your time, ask hard questions, and put everything in writing. Trust your gut—and protect your genius.
You’ve got this. Entrepreneurship is a journey, and every step you take should move you closer to the business—and the life—you want.
Thanks for tuning in to the Own Your Genius podcast. If today’s episode resonated, share it with a friend who’s considering a partnership or navigating their own business journey. Thinking about teaming up with someone in business? Before you dive in, make sure you’re protected. Hop on the MARKEDlegal waitlist at markedlegal.com—you’ll get access to our Partnership Agreement template and other resources to help you build smart, secure collaborations. Until next time, keep building your business, growing your brand, and owning your genius
