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post #1 of 7 Old 02-02-2004 Thread Starter
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Partnership examples

I''m considering a partnership on a cruising boat here in the San Francisco Bay. I''ve read several messages that talk about the pros and cons. My potential partners are a couple who are members of my yacht club and since we haven''t known each other but for a week, we would probably want a formal business relationship. Does anyone have a good example of a partnership document that they have used successfully? Did you have a lawyer draw it up? Does it make sense to have the boat owned by a limited liability corporation?

Any help would be appreciated.

Regards,
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post #2 of 7 Old 02-02-2004
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Partnership examples

R:

ANY partnership arrangement should IMO be formal, written and at least perceived to be legally binding by all parties. I adapted a partnership agreement from AOPA (www.aopa.org) that you may be able to seek a copy of and which I used when forming a partnership in aircraft ownership. It worked exceedingly well, and was later adapted from a plane to a sailboat by one of my partners, also with great success. (These partnerships have operated across multiple partners for 7 and 4 years now, respectively).

A good written agreement - essentially - does a few basic things, but it does them in clear, all-inclusive detail. Examples include:
1. It spells out all the groundrules around what is acceptable and unacceptable use
2. It clarifies the roles in the partnership and outlines how decisions will be made (who handles the money? how are repairs, maintenace & haul-outs, cap improvements to be decided on? who is liable if damage occurs? who skeds the boat, and how is the sked altered?)
3. It clarifies what happens when a partner does not meet his/her financial obligations.
4. It clarifies how selling a share is handled, who has first right of refusal, and what decisions the remaining partners are allowed
5. Lots more...

What an agreement can''t address is the chemistry between the parties. If you only know these folks superifically, you''re essentially taking a risk on your mutual long-term compatibility. (OTOH in the examples above, every prospective partner who was essentially a stranger upfront was "interviewed" - we made it a social occasion, not something stiff and obnoxious - and every choice ended up being a constructive one for the partnership - so don''t presume that a new relationship can not develop into a long-term positive partnership).

Perhaps a very good test for you and your prospective partners is to work - together - your way thru an agreement, see how you problem solve together, what your individual views are on topics like the ones I mentioned, and how it feels to you (and them) before anyone signs on the dotted line.

Don''t be frightened away about the notion of sharing a boat simply because so many problems can surface; see how you feel after working thru the process. Good luck!

Jack
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post #3 of 7 Old 02-02-2004
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Partnership examples

I understand that there are standarized, formal agreements for the sharing of AIRPLANES that can be easily adopted for the sharing of a boat. You can check out www.aopa.org and search for such an agreement to give you an idea of what to include.
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post #4 of 7 Old 02-07-2004 Thread Starter
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Partnership examples

Thanks for the advice. I went to the site but didn''t find an agreement. I think you have to be a member to access the info. It may be worth joining just to read some of the articles on aircraft partnerships.

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rjones
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post #5 of 7 Old 02-07-2004 Thread Starter
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Partnership examples

Whoosh,

Thanks for the advice. I haven''t been able to find a sample doc on the aopa site, but I''ll keep looking. Looks like aircraft partnerships are higher evolved than those for boats.

Regards,
rjones
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post #6 of 7 Old 02-08-2004
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Partnership examples

R:

"Looks like aircraft partnerships are higher evolved than those for boats."

WRT small General Aviation aircraft, there''s no reason one would need to be more thoughtful, formal or complete than the other. You might contact Boat/U.S. and see if they offer anything that would be helpful. Altho'' there are some differences, the issues of financial management, use in varying wx conditions, wide variety of destination choices, maintenance and crew competence (what''s permitted to be done with the boat/aircraft, when and by whom) are identical, conceptually.

Good luck. If the Word document for our last partnership were not marooned on a computer I can''t access at the moment, I''d be glad to share it with you...and suspect others will feel the same way.

Jack
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post #7 of 7 Old 02-08-2004
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Partnership examples

Please feel free to email me and I will send you a copy of the partnership agreement that I used on my boat.

Jeff
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