Family & Friends Going Into Business

Top tips from Ison Harrison’s Commercial Team

1. Talk about it: cover as many concerns as possible, making a list of types of contingencies that may occur. What if someone has to stay home with a child? Talk about who is going to do what in the case of emergencies or disputes.
2. Decide who owns what: you may want to split ownership 50/50- but there may be valid reasons for not doing this. For instance, if one person is going to work full time and the other part-time, a different ownership can reflect this.
3. Determine your business form: learn how different types of business organisations can suit your circumstances. Partnerships, LLP, or Limited Company? Learn which model works best for you.
4. Get your legal documents in order: It is vital that the owners of the business have appropriate contracts documenting issues such as ownership in the business and exiting the business. Create written agreements detailing roles in the business.
5. Get outside advisors involved: having professional legal and financial advisors who aren’t family or friends can diffuse tensions that may arise