Partners & Family Members

Take on a business, or investment partner, only if you have no other choice. Partners are a source of money, and of problems. I use partners only when the partner is a silent investor, or the duties are separated and well defined. If you take on a partner to get their cash or expertise, you choose the only two valid reasons. Any other reason is an excuse for not assuming the responsibility of your actions. Partnership deals should be set up with a signed, detailed partnership agreement. Be sure to get both your partners and your partner's spouse's signature on the agreement.

I have used partnerships to buy real estate, and to start businesses. I have always ended up buying out the partner. When the partner is also a relative it is even more important that the details, and duties be spelled out and that a buy out plan be taken into consideration. I always turn down partners when the partner can not afford to loose their money, or when they do not meet the only two reasons to take on a partner (When I need their cash or expertise).

http://www.sba.gov/manage/partner.htmlÂ
Information at the SBA on partnerships