Partnership Agreement for Leather Workshop Co-Owners

What a good one includes

• A detailed inventory of physical tools, sewing machines, and hide stock brought into the partnership, explicitly stating who owns what.
• A clear breakdown of daily responsibilities, distinguishing between bench-work production, retail management, order fulfillment, and administrative tasks.
• A defined structure for how revenue is split, how overhead costs like rent and utilities are paid, and how much profit is reinvested into materials.
• Clauses specifying who owns the rights to proprietary patterns, brand logos, custom stamps, and unique product designs.
• A straightforward process for resolving creative or business disagreements, including a tie-breaker mechanism to avoid workshop stalls.
• A clear protocol outlining how a partner can exit the business, how their share of the workshop is valued, and how shared machinery is divided.

Common mistakes to avoid

• Failing to document who owns expensive shared machinery, like strap cutters or splitters, leading to disputes if the partnership dissolves.
• Not valuing manual labor hours versus financial contributions, which can breed resentment if one partner spends far more time at the workbench.
• Forgetting to define how commissions are handled, resulting in confusion over who gets paid for custom orders completed outside of regular workshop hours.
• Assuming the partnership will last forever and skipping the buyout terms, leaving the business vulnerable if one partner needs to step away due to life changes.

Frequently asked questions