Before I go along, I just want to check one issue regarding CCs: is it possible for any one of the CC members to build up debt in the CCs name for which I can later be partly responsible? Before I sign any business agreement with anybody, I just want to make sure that I am protected.

Answer:
Usually when a member of a CC applies for a line of credit, (especially if the CC is new), the credit grantors will require the signatures of all the members on some form of surety document. Banks and suppliers are all too familiar with the fickleness of small fledgling businesses.

So say one of the members applies for credit in the company name, he or she in all likelihood will be asked for the CC document and this will show that other members are involved and therefore required to sign the documents.

You can protect yourself in the partnership agreement by stating that all four partners have to co-sign all credit and banking applications. The good news is that because a CC is seen as a separate legal entity, if it were to rack up unsecured debt and go under, the creditors will only be able to attach the assets of the CC and not the individual members.

A good business lawyer must be used to draw up the partnership agreement. And while you are at it, develop an exit strategy as well. This is a document where you each agree to the mechanism by which one or more of you can exit.

Just be careful: getting into a partnership with either a good friend or two complete strangers is risky. Make sure roles are well defined, the investment capital is wisely spent and you have devised a thorough business plan.