When someone decides to become a shareholder or partner in your business, they are placing a high level of confidence and trust in what you and your organization are capable of. It’s an endorsement to be proud of. Still, the final agreement between you and a shareholder or partner should be beneficial for all parties involved.

There’s a lot of ground to cover in such an agreement, but there are some critical details that should never be overlooked. Here, eight members of Business Journals Leadership Trust discuss essential steps to take when crafting an agreement and why they’re so important.

2. Discuss division of labor, compensation and potential dissolution.

Agreements to partner on owning a business start out with the best intentions. However, they rarely operate “perfectly” throughout their life cycles. Before you begin a business relationship, discuss the following factors up front: how you will divide the work, how you will be financially compensated for different levels of effort and/or results, and how you will dissolve the agreement when or if it’s necessary. – Aviva AjmeraSoLVE KC