My son is an impressively intelligent, honest, and thoughtful business person, with a good career.  In many ways he’s well ahead of where I was at his age. He’s a thorough and objective planner, and not afraid in the least to challenge his old man’s thinking.Despite all his talents and his high integrity, I told him earlier this week that I’d never go into business with him unless we had a lawyer walking with us on every step of the journey. In fact, I would want each of us to have our own attorney.This isn’t because I don’t trust my son — far from it. It’s because having a long and solid relationship — with a close relative, a trusted friend, a former business partner — isn’t enough to insure that unforeseen conflicts won’t occur.I have a close friend who once refused to sell me one of his cars — a car he was eager to sell and that was perfect for me. His rationale:  friends (or relatives) should never enter into business transactions. The relationship was too important to risk being damaged by a deal gone sour. I’m not sure I’d go that far, but his concerns are real.

Even if you're starting a business with your freaking SOUL MATE, get a written agreement that covers every contingency ...

Throughout my career, I’ve seen partnerships formed with the loosest of planning, without solid legal advice,  even without written plans or expectations. The reason for the lack of planning was often an expectation that the personal relationship, so solid at the time of the start-up, could withstand any issue that came up. The thinking goes something like this:

• “We’re so close that we’ll be able to work through whatever challenges come our way.”
• “Putting a lawyer or a written agreement in place would indicate distrust. I don’t want to ask tough questions because I don’t want my partner to think I don’t trust her.”
• “If you can’t go into business with your friend (or brother, or father, or daughter), who can you go into business with?”

But everything changes. Relationships change. Finances change. People’s passion for their business waxes and wanes. People get sick, and divorced, and hooked on bad stuff. None of this seems likely at the beginning, but you must be prepared for any outcome. Some of the saddest situations I’ve observed in the business world are partnerships gone awry, where both partners are stuck in untenable situations because no charter, by-laws, or legal remedy exists to provide structure to resolve the difficult issues.

YOUR PATH FORWARD: Even if you’re thinking about forming a business with your very bestest friend in the whole world, and even if you and this person have never spoken a cross word to one another — even if you are freaking SOUL MATES — get a good solid written, legally-constructed agreement that covers every imaginable contingency of personal disaster, malfeasance, irresponsibility, or downright bad behavior that could ever happen. Because it might!