Can anyone tell me the down side of going into business with a friend, regarding legalities.?

If one person in the company was to over spend is the other person liable for that debt as well? Any tips on how this works as i have never been involved in a joint venture before. What should I considder in all this?

There is some good advice already posted in the above replies. One thing that has not been mentioned is to set up the business bank account that requires both partners signatures on cheques. Do not get a credit card but use a debit card and have an agreement with your partner that when the current account goes over a certain limit the excess is transferred to a savings account which again requires both of you to sign for withdrawals. This allows for one partner to be able to pay out for basic business needs but only up to the agreed limit in the current account. This should safeguard against overspend or fraud.

Best to get it drawn up with a solicitor.

Never mix business with pleasure................
Business should be kept as that with no emotional issues to affect it, which is what would happen if you were dealing with a friend..in my opinion.

The first thing you need to do before going into business, especially with a friend, is to have a contract drawn up by a Solicitor outlining who is liable for what.

I worked as a Legal Secretary and unfortunately I saw lots of cases where things had turned very sour between former best friends because one person was more irresponsible than the other. Only one of them had papers drawn up to begin with, and he was the only person to win the case - meaning that he and his business partner were each liable for what they had spent in the business.

Ideally though, if you are joint partners, all financial moves should be discussed beforehand and agreed on. If your business partner goes ahead with something without consulting you, it would be out of line. If you are joint partners you'll have to make the decisions together.

I hope this helps

xx Emmie

I used to work for a garage where two friends had got into business together. They fell out big-time, and the fallout was probably even worse because they had been friends before and shared a lot of the same friends and network. So I'd advise against it.

Well, I have never recommended friends going in business together. Usually it ends badly. But if you really want to pursue this, then please write down everything that you are worried about, your friend should do the same and then take your worries to a lawyer. Have him draw up a contract between you and sign it !!! Don't feel bad about bringing things into the contract that make your partner think you feel he may not be trust worthy it is better to have it written in stone then to be buried in debt!!!!

Yes, the other person is liable. Going into business with a friend or relative is not such a good idea since any problems that happen will cause a rift in the relationship. Also, from your question, it sounds as if you don't yet have much business knowledge. I'd recommend you go to small business classes at your local community college before you get involved in any business, far less a partnership. There's so much legal stuff you are required to know.

In any legal "partnership" the other partners are liable for the other partners screw-ups. A joint-venture is different. Typically JV's are a one-time venture or project and then the JV is terminated. Duties and responsibilities are determined typically by agreement.

I rec. a Limited Liability Company for "business" ventures that are intended to be perpetual. Your risk is typically limited to the assets of the venture and typically don't go into personal asset in the event of default or lawsuit.

There is a reason for not going into business with friends or relatives....