When should you sign a pact partners?

When should you sign a pact partners?

When should you sign a Pact partners?

Have you heard of the Pact partners? You've probably heard in passing, that is the first time you read: "covenant partners" , "agreements between partners" or "shareholders agreement", if so, I have the honor to introduce other also important document for the future of the company as the marketing plan , or the well-known business model or business plan. This however is crucial to avoid fights, arguments, different points of view, or bounce once the project on track and when there is no turning back.

At first everything is illusion, goodwill, good vibes. If we already have all spoken, why leave in writing and agreed upon what we accomplish? It is always a good exercise to write, capture on paper our idea to so; examine ourselves and see where we failed or were missing something, that we envisioned in our head perfectly.

The pact partners refresh our memories, both to us and to our / s partner / s, when needed, on how we are committed to the project. It is therefore not dilate much good writing it in time.

What can we deal with a covenant partner?
Vital and basic issues such as: the roles to be played by the partners in the company, the salary of each of them, their responsibilities, dedication to provide (partial or total), sale of shares and a very important; the measures to be taken if one of them fails to comply with the pact.

We can add commitments of permanence and describe the penalties if not met, or non-competition agreement, stating that none of those named belong to another company in the same sector.

With the agreement we can limit the power of action of the administrator, in favor of joint decision-making between partners.

We also agree that our pact prevails, in case there is disagreement with the statutes.

Other points to consider are: partial annulment, this means that if any provision of the document is set to zero by the partners, the remaining remain active and the agreement remains valid; and the ubiquitous confidentiality clause.

When should you prepare and sign a Pact partners?
You can write it at any time, it is advisable as stated above is done from the start, given that the Pact partners is a private contract, shall take full effect, although we have not incorporated the company.

We can distinguish several stages in the life of a startup: seed stage, early stage, growth stage, expansion stage.

1. Seed stage: is the initial stage of the project where we do not have a solid financing and are building the bussines plan; this is where it is advisable to start defining some basic strokes the pact partners: functions, limitations, dedication, contribution the project.

2. Early stage: at this stage we are already more advanced, we have a product and customers consuming them, started having employees and our growth begins to take off. Surely we need an injection of capital and new partners enter Taking advantage of this situation, we modify the pact written above partners, specifying more precisely what I mentioned earlier.

In case you have none, it is the time of writing, or even the new partner we will impose theirs.

3. Growth state: A growing! At this stage we have our well-defined business model, more or less consolidated our startup, with stable profits and a growing number of customers. Although our cash flow is greater, at this stage the role of external financing is important to fight our competition.

Fact or not our covenant partner, at this stage we negotiate again and regulate the conditions of entry of our investors in what is known as the Investment Agreement.

4. Expansion state: It's time to expand into new markets and segments, we have to have a good preliminary study and a clear strategy to avoid crashing, the risk is still higher than in the previous stages.

External funding is crucial at this stage, where surely we will embark on the adventure with a venture capital company and would develop what previously named, an investment agreement.

In short, the Pact partners is an ideal document when your project a new person, both physical and legal it is incorporated. Giving us the option to reflect and describe the extent we want the "obligations" and "rights" of the parties involved in it.
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