Setting Up A Partnership

[WelshPixels]

Hi All

I am a total newbie when it comes to all things legal so excuse my non-legal jargon explanation of what I want to achieve.

I have an idea for a website that I think can make a lot of money. Unfortunately I don’t have the skills to develop it. So I have approached a local programmer with the skills I wanted and to cut a long story short we have agreed to form a partnership based on our skills.

I will be looking after the front end of the site along with the SEO and the marketing where as he will be looking after the back end of the development.

My biggest worry is we will sign this agreement and he doesn’t deliver on his side of the agreement. This will leave me unable to progress with the idea.

Is there anyway I can protect myself from this and ensure that he either delivers or the partnership gets dissolved?

Thanks

 

[Urban Space]

I'm sure there's some sort of contract or something! I'm not the best person to be replying but someone in the know will be along soon!

Liam

 

[bwglaw]

My biggest worry is we will sign this agreement and he doesn’t deliver on his side of the agreement. This will leave me unable to progress with the idea.

Is there anyway I can protect myself from this and ensure that he either delivers or the partnership gets dissolved?

Thanks

Just like any Partnership, one partner may not be as effective as the other. That is the risk any sole-trader has to take when embarking on a Partnership. However, a Partnership Agreement drafted to your requirements can include clauses to outline who is responsible for what, etc.

In your circumstances, perhaps you should think about a 'Conditional Service Agreement' instead unless you all are serious about going into business together as Partners and be 'joint and severely liable' for any liabilities under the Partnership.

If you have just met the programmer, I would advise to avoid taking the Partnership route and take the 'Conditional Service Agreement' route where the programmer would be providing his services subject to conditions.

I am able to draft one for you if you wish if you just email/PM me

 

[WelshPixels]

Thanks for the advice.

Could you give me some more info on the 'Conditional Service Agreement'?

The site I have in mind will grow through some set phases so I need to have someone onboard that has the incentive to push things forward. This is the reason why I was offereing a partnership.

Could I have the 'Conditional Service Agreement' in place until the first phase is completed with the promise of a partnership built into the agreement?

Many thanks again

 

[bwglaw]

Thanks for the advice.

Could you give me some more info on the 'Conditional Service Agreement'?

The site I have in mind will grow through some set phases so I need to have someone onboard that has the incentive to push things forward. This is the reason why I was offereing a partnership.

Could I have the 'Conditional Service Agreement' in place until the first phase is completed with the promise of a partnership built into the agreement?

Many thanks again

You should not create an agreement that complicates the role of a service provider and a Partner in a bona-fide partnership. This will cause problems later.

You could offer a 'conditional service agreement' and outline how the programmer will be paid i.e. % of revenue, % profit, etc. This will need careful thought as to which would be more favourable. Obviously % of profit would be favourable if its a new project/business. You could state how and when you will determine and distribute the 'commission'. Keeping it strictly 'service provider on a commission-only basis' will be simplier and does not cloud your business interests. Additionally, by following this route you are retaining all legal interest and the programmer will have no legal right to any shares, control or decision-making of the business. You do need to establish how YOU intend to enter into this agreement i.e. individual, partnership or as a Ltd Co. Which you choose may well reflect on the wording of the agreement.

Whether you have a Partnership Agreement or a Conditional Service Agreement the programmer can lose his incentive to participate at any time. The important aspect to this is if this happens what rights does he have upon his departure so as not to jeopardise your project/business thus enabling you to continue to succeed.

It is difficult to explain what a Conditional Service Agreement consists of because this differs from business to business. It will basically outline the agreement that the programmer agrees to provide his services in exchange for % commission of revenue, profit etc. It will also have a clause on copyright, confidentiality, employment rights (none! - just to confirm that the programmer is purely doing business on his own account and is by no means an employee etc), and many more clauses. The agreement I use has about 15 pages!

Once you have decided how YOU are going to be part of the agreement then you need to sit down and think a list of terms that you wish to be incorporated in the agreement. Ideally, you will have discussed this with the programmer and he is content with your proposal, upon which an agreement is drafted.

When drafting agreements I do not use a standard template and I take into account your requirements and any other clauses that may be relevant to your business/work etc.

Hope this goes some way answering your recent post.