Before you enter into any detailed conversations with another business regarding partnership opportunities, value-added services, products you offer, and types of resources at hand, the first piece of legal documentation you should request to sign is a Non-Disclosure Agreement (NDA) or Confidentiality Agreement (CA). Essentially, this agreement signed by both parties delineates the key items that both parties will be protecting, such as technical documents, intellectual property, business processes, client or project specific information, confidential information (CI), etc. By signing this agreement, both parties agree to discuss confidential information about their business and both agree not to disclose the information shared for a specified period of time.
Once you and the prospective business partner have agreed that the relationship would be of mutual benefit to one another, it is advisable that before you begin executing any business activities that you set the terms of the business relationship with a partnership agreement. This can be in the form of several types of agreements, the most common to include:
- Teaming Agreement (TA) for joint ventures
- Subcontractor Agreement (SA) for services one partner will provide another
- Master Services Agreement (MSA) for setting terms of future transactions
- Reseller Agreement for allowing one partner to resell products/services of the other partner
You should always seek professional legal advice prior to signing any contracts and prior to attempting to write one on your own. As a small business, capital resources may be limited, so as an alternative, instead of procuring legal assistance for every contract you sign, it may be helpful to procure the assistance of a lawyer to provide a set of templates of such contracts that you can use on multiple occasions. Again, depending on the subject and terms of the business partnership, you will need to use your best judgment and seek legal advice. However, don’t let the fear of partnering with another business stop you from seeking new opportunities. These opportunities can be very rewarding in many aspects and will allow you to build your business in ways you may not otherwise be able to with the resources and capital at hand.