The most wonderful friend or family member can turn into something you utterly do not recognize, as soon as you add money to the equation.
After owning several businesses, and specially in the grocery business, I consulted for other people starting businesses for awhile. I would tell people when the subject came up, not to trust anyone. This is against my true nature, because I would really like to think everyone is a good person, and given the chance most people are. But if given the opportunity to steal, most people regardless of how good a person they are, will take it. I can recite endless studies on the subject that prove my point.
So the idea is to remove as much of the temptation as possible. In other words don't give them the opportunity.
I have a close friend whom I have been in business with on different ventures for many years now. I brought him in as my business manager in what I'm currently doing. But I have also brought him in as a business partner. We did this by creating another corporation we each hold equal shares in. This corporation is paid a consulting fee by my company, which the company holds and pays as either salary or dividend to each of us. If we ever have any issues or want to dissolve our partnership, my company will stop paying the consulting fee to the corporation we both own stock in, and that's that.
There are many different ways you can protect yourself and your business from a partner that might try to do something that would harm your business. At this point I would be concerned your partner might try to steal your customers away. One way to resolve this problem before it ever starts is for each of you to sign an NCNDA before you enter into a partnership. This document will at least give you some legal teeth if you ever have to take the case to court, but also acts as a deterrent as well. Here is a link to a generic form of this document that can be used for your own purposes.
http://www.i-waycommerce.com/NCNDA_Legal_Document.pdf
Scott
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