Many start-up businesses are a joint venture between two people - and at its simplest form, there may just be an understanding between those two people that they will contribute equally to the time and resources required to get the thing going.
In the frenzy of business plans and goal setting and opening bank accounts and search engine optimisation, we wouldn't suggest spending precious resources in getting a watertight legal agreement in place at the outset. Not to say that this would be a bad idea, but it's not necessarily the best use of time and money at this delicate stage.
To help in this situation, we've put together a two-page joint venture agreement. It is not intended to be legally binding, but it may help make sure you've both got a common understanding on some of the basics.
Click the following link to download the agreement:
By the way, in some legal jurisdictions, a document like this may have legal implications. If you're at all worried, you should get legal advice (and also reconsider whether you've got the right joint venture partner).
Now, at some point you're going to want to invest in a proper legal agreement. Why? To give you both peace of mind on the "what if?" questions that can strike in the middle of the night.
- what if one of you loses the appetite to continue to invest time and money in the business?
- what if one of you leaves, and wants to take clients / customers / confidential information with you?
- who gets to keep the domain name / code / assets if one of you leaves?
- what if your roles change, and one of you is putting in a lot more value than the other?
- what if one or both of you have to give personal guarantees, e.g. to a bank?
- what if something happens to one of you? How would the business continue? What would happen to the share of the business which belongs to the one who can no longer work in the business?
If none of these questions seem very relevant right now, then it's probably not the time to worry about the legals. If if any of them do ring bells, then putting the venture on a firm legal basis can be a very worthwhile investment.