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You want to start a business but lack expertise, experience, capital? A partner may be the solution. Provided you take the usual precautions:
Reasons for taking on a partner:
It is important to join forces when looking for additional skills (management, marketing, commerce, etc.), or when there is a lack of funds. However, be sure to keep the majority of the share capital in order to be able to control the company. Moreover, associating gives more credibility in the eyes of the banks. An economic partner will prefer to deal with a company rather than with a single person.
Precautions to take:
Check the associate’s background. Make sure that he has not been banned from managing during a previous activity or that this company has not been subject to bankruptcy. If so, that means the partner is not a good manager. Also check his motivations and skills, his matrimonial regime (the fact that he is married also associates his spouse), but above all that he is not already associated with a company competing with yours, which could put it in danger .
Write a partnership agreement:
In addition to writing the articles of association, write a private law contract, called a shareholder’s pact or a partner’s pact. This document clarifies the relations of the partners during the life of the company (avoiding intrusions into the social capital for example), but also a posteriori. A non-competition clause will in particular prevent the partner to whom you have learned everything from leaving the company overnight, taking all of your customers with them.
DAMY Law Firm , Nice, Update 2022
