Forums: Discussions for entrepreneurs and small business.

I received advice once that when two people go into business together, they shouldn't split ownership 50/50, because it will inevitably lead to arguments and strife.

Do you agree with this? And if so, any advice on how to determine who gets the bigger share of the 51/49 split?

A 50/50 partnership requires you to both agree on major decisions or you may end up in stalemate. Your operating agreement, however, could designate one person to be the final decision maker on certain types of questions and the other person on their areas of expertise, with consensus required on only certain topics.

This article from our website, "Startup Partners -- Can You Work With Someone Close to You?" for more of our thoughts on partnerships.

Best regards,

Molly Donaldson

It all depends on what is the business model you guys are following. Moreover, partnership is based on trust, so before venturing out in to anything the other person should be trust worthy and you should share the same vision as other peron. Also, partnesrhip model depends on inverstment and responsibilities...you would not face any issues with a 50-50 model, if responsibilities and business model is clearly defined.

I agree. It would be terrible if down the road, one of you starts to slack while the other takes on the additional responsibilities and the contract is still 50/50. If you already have an established business, you might want to consider a joint venture. If not, be sure who you're working with has a heart that's in it for the LONG haul. I wish you all the success.

I don't really encourage 50/50 partnerships as you will be stucked in a deadlock. It's better to get a few more partners to find a limited company.