Partner’s Perspective: A Handshake Won’t Save Your Business

Every failed partnership starts the same way: with good intentions. Every legal battle over equity, control, or exits? That starts when trust runs out. And here’s the hard truth — most business conflicts don’t happen because of bad people. They happen because of bad structures.

Who Deserves What?

One of the biggest sources of conflict is equity. Who owns how much? Who should have more control? Is it fair for someone who puts in money to have the same share as someone who puts in sweat?

Below is a simple framework that balances capital (money) and labour (effort/expertise). Every industry is different. Some businesses are capital-heavy. Others depend on expertise and execution. But this serves as a fair starting point:

• 50% Capital Equity (for financial investment)
• 50% Labour Equity (for expertise, effort, and operational management)

For example, imagine three partners:

Mr. A invests RM1 million but does not work.
Ms. B invests RM1 million and actively manages the business (40%).
Mr. C provides technical expertise but does not invest money (60%).

Now, let’s see how their equity stacks up:

Put It in Writing, Before It’s Too Late.

If equity isn’t structured from the start, it will become the biggest source of conflict later. Nothing strains a partnership more than ownership disputes.

• A handshake isn’t enough.
• Verbal promises won’t hold up in court.
• “We’ll figure it out later” is the fastest way to regret.

Define it. Write it down. Make it legally binding. Because once the money starts flowing, trust alone won’t hold a business together.

#BusinessPartnerships #EquityStructure #CorporateGovernance #SyarikatOng