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Three Ways to Protect Yourself in a Business Partnership Put everything in writing. No matter who your business partner is, even if it's your brother or your childhood best friend, a written partnership agreement is a necessity. ... Build a financial safety net. ... Choose your structure carefully.

Partners in a general partnership have shared liability for the debts and obligations of the business. Every partner agrees to unlimited personal liability for their actions, the actions of all other partners, and those of any and all employees.

Build a financial safety net. To protect your financial interests, make sure your written agreement limits the amount of debt that can be tied to the partnership without your consent. Invest in a comprehensive insurance policy that will protect the company from potential losses.

This article shares important tips on protecting yourself in business partnerships. Know Your Partners. The problem with a partnership is that it takes time to know someone well enough. ... Be Safe from Partners' Debts. ... Have an Exit Strategy. ... Stay Professional. ... Use Your Assets. ... Ensure Proper Accounting. ... Have an Experienced Lawyer.

Start with a basic agreement on roles, responsibilities and control. Then, plan to hash out other issues as they arise over time, she said. If you're adding a partner because he or she offers something you lack, make that clear. Spell out your long-term goals as well to make sure you're on the same page.

This protection is often referred to as personal asset protection, or limited liability, and is a privilege offered to formal business entities. Essentially, this means that there is a legal division between the business itself and its owners, which separates the company's assets from the personal assets of each owner.