What to think when starting a business with a friend or family member?

Starting an online business is about something other than just selling products and generating revenue. It is also about saving your resources and rights. Legal templates and pages are best to project online businesses.

Does every website need legal pages?

Yes. But does every website on the internet have legal pages?

To tell you the truth, No. Not every website on the internet has legal pages on their websites yet they are running.

Your question would be then why is it important? Why should I buy legal templates and pages to protect my business?

How many of you have run a red light? We all know it's not safe and legal to run a red light. Yet we still at times have run over it. In the hope of not getting caught. And we are in bad luck, you get caught. You will face the consequences of it.

Just like that websites that are running without legal templates and pages are at higher risk. In any unwanted situations, they can get you in trouble. What kind of trouble? Lawsuits and penalties/fines.

Do not put yourself in a situation like this. You should have a trifecta of legal pages on your website. To protect yourself, your business, and your money.

What is the trifecta of legal pages?

The trifecta of legal pages are:

  1. Privacy Policy
  2. Terms and Conditions
  3. Disclaimer

These are the most necessary pages for every website.

Privacy Policy

  • Privacy policy is one of the most important legal templates and pages of your website. It is required for many jurisdictions. If you don't have one on your website you could face penalties and fines.
  • It improves user’s trust in websites and businesses. They are more comfortable to share information after knowing how and when you will use their information.
  • It tells users how you collect and use their information. This protects you against lawsuits as it has already established boundaries.

Terms and Conditions

  • They are used as the pillar to build rules between you and viewers or clients. When someone uses your website they are agreeing to your rules. 
  • When users agree to your rules, it limits your liability. It reduces the risk of legal disputes.
  • It protects your intellectual property. Terms and Conditions ensure that you keep ownership of your intellectual property rights.

Disclaimer 

  • Some users might be misunderstood by the information you provide. Disclaimer is used to prevent these misunderstandings on your website.
  • In the disclaimer you are making it clear to the users that your statements are not a substitute for professional advice.
  • Some people might take your statements out of context, do something that doesn't have good results, and in the end blame you for it. Disclaimer lessens your risk of litigation.

Therefore it is important to have the trifecta of legal templates and pages on your website. It saves time, money, and effort. Most of all it saves you from many legal disputes.

What to think when starting a business with a friend or family member?

Picking a business partner is like picking a travel buddy. You both will face many challenges, have adventurous moments, and have many ups and downs. But sticking together and giving company and support is what makes travel memorable.

Picking the wrong partner means short-term misery and a ruined relationship can even take you to legal consequences.

The first person you have in your mind when starting a business is your family and closest friend. You both have known each other forever and so do trust each other. 

What can go wrong between two lifelong buddies? A business will not make any difference. So much can go wrong. I will say that again. So much can go wrong.

They are the most trusted people for you. But human nature betrays when money is involved. Money can show the true colors of the most trustful people. I may have been too harsh here. But that is the reality of life.

So really, what could go wrong?

  • Losing the relationship
  • Losing associated relationships
  • Litigation

Some wrong aspects pop up in my mind right now. I am sure there would be more negative consequences.

How do you avoid this?

There are two essential steps that everyone should take before starting a business with family or friends:

Have uncomfortable conversations.

Put it in writing.

Most people want to avoid these important steps. Thinking that making your friends and family sit down for this particular reason will make the situation awkward.

While doing business results are not always welcoming. Times come when things do not occur as planned. That’s when problems arise between partners. Clearing everything in word before starting the business is the key to avoiding any conflict.

How do you protect all parties when you are starting a business?

Set Clear Expectations and Boundaries

While creating an agreement you should have a clear outline of roles and responsibilities to each party of business.

If you are working all by yourself then you need Individual Legal Templates, like Independent Contractor Agreements. If you are working with family or friends then Partnership Agreements are best for you. Whichever startup legal templates you are looking for The Cut JenStone has all ready for you.

Prepare for the Unexpected

Be prepared for any unexpected situation.

In the situation of a warehouse fire, who is responsible for getting insurance?

Don't act unprofessional and look at all business partners.

Put it on agreement for who is responsible for getting the insurance in this situation. In agreement, make everything clear who is responsible for what situation. This minimizes the risk of putting the relationship in the danger zone.

Defining Ownership and Profit Distribution

Everyone works to make money and pay bills. Whoever works harder than another person thinks that they deserve more credit. In business terms, more credit means more money.

To not let your relationship get bad over this money situation, put profit distribution in writing. Fix a percentage that each person owns in the business. To have everything run smoothly, write what they will be paid out upon.

The Partnership Agreements and Operating Agreements are the best legal templates for Ownership and Profit Distribution.

Conflict Resolution

What if your partner is not working or contributing to the things they have agreed on? You are doing all the work and feel like you are the only one running the business. Include these points in your agreement to resolve this issue. 

IN SUM: 

When starting a business with friends and family, you should always write a clear agreement about the roles and responsibilities of each party of the business. It avoids misunderstanding and conflict and saves relationships.

Visit The Cut JenStone, where I have written all of the legal templates by myself. I have been practicing law for over 10 years, and I care about the quality of work I put out into the world.


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