If you are thinking of buying into a business and becoming part of a partnership then your first step should always be to look into the prospective partner to check that they are reliable, trustworthy and legit. This is separate to your other investigations of the company (which must also be thorough and include assets, prospects, accounts, track record etc) but it is just as important.

For starters, remember that you will jointly be a partner with this person and therefore you will be equally liable for any debts accrued by the partnership. What this will mean is that if the business has bills that need paying and the partner doesn’t pay their share, whether because they have no assets or because they simply refuse, then you will have to cover all of it, not just your own share. Consequently you’re going to need to satisfy yourself that your potential partners have assets that could cover any obstacles and debts that might befall the business as well as doing your research on their credit history and their history of paying the company bills and their own bills. Any history of debt or unpaid bills should be a big red warning sign to be careful.

Secondly, don’t forget to sit down and think about whether you will be able to get on with this person. Being able to coexist in a partnership is essential. Conflicts of personality can be debilitating for a business even if the numbers are working well.

Thirdly, bear this in mind –if you’re buying into a partnership where there are already a couple of partners, then research and negotiations will inevitably take a lot longer and be more complex. More than one person means that two or more people will need to agree on your coming into the business.

Lastly, make certain that you use a lawyer to get the partnership properly written up or to go through the partnership agreement your new potential partner hands you. This sounds obvious but you would be amazed at the amount of people that don’t bother with even this obvious step.

Alex is a financial journalist and writer. He loves writing about business and spends most of his days writing about mortgages and credit cards. He also writes a blog for Coupon Croc .