Don’t set up business with a partner, even if you also consider them a friend, without a written partnership agreement. This is a step that a lot of business professionals, young and old alike, tend to skip. That’s very problematic and can make things much more difficult than they should be.
The issue is that you tend to assume things will go well. You’re optimistic. You want to start the company, and you can’t imagine disagreeing on anything. A written contract sounds excessive.
Fast forward two years, though, and you could have all sorts of issues. Maybe your partner is taking company money for personal use, but you never established how much either of you would get paid or what money belonged to the company. Maybe they’re making decisions without asking you, but you never actually talked about who had the power to make these decisions. Maybe they’re talking about selling, but you’re not even sure what percentage of the company you own.
You also want to plan for the unexpected. If your partner gets sick or passes away in an accident, what happens to the portion of the company they owned? How much was it? Who gets it? Does this person now get a say in company business, or do you need to pay them the value of that half of the company?
Every situation is different, but the key is to remember that things may not always go as well as you hope. You want to plan in advance, and that means looking into all of the legal options you have. Leave nothing to chance.