Don’t rush into a partnership. The success of your business depends on it. 

Most important of all, seek and pay for expert professional legal advice and tax advice. 

Not all partnerships or joint ventures are created equal. You need to consider your goals and future aspirations for the business. If you are thinking of entering a partnership or joint venture, consider the following issues:

a)  Make sure you trust anyone you go into business with.

b)  Vet everyone involved in your business dealings. Make sure they are trustworthy and dependable.

c)  It is imperative to conduct background checks and speak to personal references for your business partner(s). This will protect you in the long run.

d)  A potential issue will become an issue if you don’t address it in advance.

To design a business partnership agreement that fully captures the nuances of your relationship with partners, you need to understand how they will operate.

A partnership agreement that defines a dozen or so of the critical areas of the business is essential to most solid partnerships.

1)  Always make sure you have a clear understanding of what each officer is authorized to do on behalf of the company.

2)  It is important to outline each partner's responsibilities and duties, because when not clear then there will be misunderstandings. Moreover, it’s important to have a predetermined consequence for partners not completing their duties.

3)  Capital from stockholders. How much time, money, and assets are each partner contributing to the partnership? This includes the initial capital as well as any future amount that may be necessary to keep the business running should you need it.

4)  Dividends, salaries, compensation, and losses. Any right of the partners to receive discretionary or mandatory distributions, which includes a return of any or all of their contributions, needs to be clearly and specifically set forth in the partnership agreement.

5)  Unanimous vote requirements: The number of shareholders a firm needs to have unanimous agreement is often decided by the management team, and they can make provisions for a lower threshold if it becomes important.. What decisions must be made by unanimous consent?

6)  Dissolving the partnership and winding up its affairs. For example, If you are entering into a long-term real estate deal that has an exit clause, avoid the possibility of litigation by agreeing on timelines for that clause to be used or terms.

7)  A buy-sell provision. A buy-sell provision is a common feature of business partnership agreements. It establishes how the partnership will deal with the issue of one partner’s death or departure from the company. A buy-sell agreement is a special kind of contract that provides for the sale and purchase of shares in a company, such as when a shareholder dies or wants to sell his or her share in the company.

For example,

-  what if one partner voluntarily or involuntarily leaves the partnership? How are they bought out?

-  What happens if you want to sell your ownership interest—should your business partner have a right to buy it before you sell it to a third party?

-  What if your business partner dies? Or gets divorced? Or files for bankruptcy? Or just wants to retire?

9)  A non-compete agreement is a contract between two or more parties in which one of the parties agrees not to enter into competition with another party. The most common type of noncompete agreement is an “employer-employee” agreement where an employer seeks to enforce a post-employment restriction on its former employees against competing with their former employer for a period.

You and your partners should sit down and discuss the best- and worst-case scenarios. You should hire a competent lawyer to represent the company or have each partner hire an attorney to review the partnership documents and address the above issues, as well as the individual needs of your situation.

The impact of Brexit is far-reaching and is likely to negatively impact on a number of industries, one being hospitality. 

At present around 3 million EU nationals work in the hospitality sector in the UK and the changes that are set to take place could impact on legislation as well as individual’s right to work.

The current situation

Out of the 3 million EU nationals that work in hospitality, 700,000 are based in London, which is the equivalent of 1 in 7 jobs in the capital. When you compare these figures to the UK workforce as a whole, it becomes apparent that the hospitality sector is much more reliant on EU nationals than other industries. 12.3% of the UK hospitality workforce is composed of EU nationals, whereas the national average is much lower, at just 6.9%.

The hospitality industry relies on these EU nationals to help sustain growth and it is likely to be impacted by changes to legislation, which would mean that the flow of workforce would be restricted or would mean that those already employed would need to leave thanks to changes in legislation and contracts.

So, what can businesses within the hospitality industry do in order to continue to grow and succeed in light of Brexit changes?

Buckle down with training

It is already apparent that Brexit is going to result in a serious skills shortage and gap, so in order to remain competitive, hospitality businesses will need to invest in training members of staff that they are able to hold on to. Businesses should consider the merits of in-depth college courses for long-term employees.

Removing negative perceptions about the industry

One of the main issues that has blighted the hospitality sector over the years is the negative perception about the industry. Many deem it be full of zero hour contracts with long hours and poor rates of pay. Businesses should focus on promoting the potential for long-term and fulfilling careers by offering graduate schemes and paying more attention to creating a positive company culture.

Creating working partnerships

In order to remain successful, the hospitality industry needs to consider how teaming up with colleges and universities for working partnerships can help them to remain relevant. Government support will also be needed in the form of incentive-led schemes, enabling those who have been unemployed for a long time to return to work.