Going into business with friends? Get the agreement right from the start

Starting a business with friends can feel straightforward. You know each other, you trust each other, and the early conversations often feel simple: “We get on well, so we don’t need anything too formal.”

We hear this often. No doubt other firms do as well.

But business relationships are rarely standard. Every business has its own people, goals, risks, financial pressures and future plans. What works for one group of owners may be completely wrong for another.

A precedent or template is only a starting point. It can help frame the discussion, but it should not be treated as the finished product. The real value comes from asking the right questions, understanding each party’s expectations and shaping the document around your particular circumstances.

This is especially important when friends go into business together. A well-drafted agreement helps protect the business, the investment and the relationship by reducing the risk of misunderstandings before they arise. One size does not fit all.

That is where good legal advice makes a real difference. An experienced lawyer can identify gaps, challenge assumptions and explain the practical consequences of different options. The aim is not to make the process more complicated than it needs to be. The aim is to make sure the agreement actually works for you.

The best process is usually a collaborative one. It gives everyone space to talk through what they expect from the business, what they are contributing, what they want to protect, and what should happen if circumstances change. It also helps uncover issues that may not have been obvious at the outset.

Taking the time to get this right at the beginning is almost always better, and cheaper, than trying to resolve a dispute later. Litigation, damaged relationships and business disruption can be far more costly than putting a carefully considered agreement in place from the start.

If you are going into business with friends, do not rely on an off-the-shelf document and hope it will cover everything. Get advice early, ask the difficult questions while the relationship is strong, and make sure the agreement is tailored to your circumstances.

Talk to Haigh Lyon about putting the right agreement in place before you start, so you can move forward with clarity, confidence and proper protection. Contact Anthony Kuran on 09 306 0611 or @email or Andrew Knight on 09 985 2531 or @email