Steps to “prenups” for business partners

Written By Steps To Faculty Published September 30th, 2010

Are you about to enter a partnership with someone. Chances are business unions, kike other partnerships, require a formal legal written document to protect everyone involved. These documents are known as prenups can save you and your business partners a great deal of money, agony, and time in the long run. Begin your business on the right foot by forming a prenup so that you and your business partners know where each stands at the inception of your business. Prenup forms can be found at,, and

Step 1 Assess the business

Before drafting up a prenup, you and your business partners should seek the help of a business evaluation specialist found at The business evaluator can see how you began starting your own business and help determine the exact value of the business in relation to what you and your business partners each truly invested in terms of money and of time and resource.

Step 2 Get a professional

Even if you and your business partners draft up a document, you should still seek the help of a legal professional to ensure the value of the assets are clear and the amount each partners invested is understood. You want to avoid miscommunication and misunderstandings upfront so that you can continue the process with ease. It is during this stage that initial conflict occurs because everyone is not on the same page.

Step 3 Talk

You need to sit down with your business partner and discuss how much cash flow from daily operations are being used as your personal income. For example, suppose partner A is a multimillionaire with no children and has a spouse that works as a surgeon at $250,000. Suppose partner B used all of their life savings to invest in the business and has to send 3 kids to college on their own. If A wants to reinvest all of the cash flow generated from operations, this will be a big problem for partner B who needs some of the cash flow to live. Agree upon how much each partner can withdraw from the business as part of the initial pre-nup drafting stage. This will prevent complications for all later down.

Step 4 Protect the interest of the business

To often the personal problems of one partner affects the state and financial condition of the business. Such issues include personal bankruptcy or divorce. Protect the business by forming a clause that allows the business not to be impacted by such. There should be enough investment and cash flow that the business does not have to close due to the insolvency of a single partner.

Step 5 Be specific

Itemize the exact dollar amount each partner should expect to receive monthly and yearly from the business. This needs to be clear to ensure that enough cash flow can cover this.

Remember, a prenup is to protect the interest of everyone involved as a partner. Please visit for more great business advice.

Roger Due

Investing in Your Destiny® & Coaching Program - Wealth Building Summit Dallas, Texas

My name is Roger Due and I am from Albuquerque, New Mexico and I am the owner of the Monsano software company. This has been an absolutely fantastic conference. This is the best I have ever been to.