1. Transparency: It fosters an open and honest communication channel between the entrepreneur and stakeholders. 2. Trust: It helps build and maintain trust, which is essential for long-term business relationships. 3. Ethical Responsibility: It ensures that all parties are aware of the potential risks and rewards, which aligns with ethical business practices. 4. Legal Protection: It can provide legal protection for the entrepreneur by documenting that all stakeholders were informed and agreed to the terms.