A business partnership is like a marriage in a lot of ways. You and your business partners joined together because you had a common purpose that you both found worth pursuing for your mutual benefit. And, like a marriage, your partnership means you have rights but also obligations.
When disputes arise in your partnership, there are many business and legal avenues you can pursue to get what you want, but not all of them will result in a happy, harmonious, and lucrative business marriage for years to come. Thus, you and your business partners should try to resolve your disputes productively so that both you and the partnership continue to prosper without damaging your business, brand, or bottom line.
Make Sure Your Partnership Agreements Reflect Your Actual Situation
Disputes often occur when partners fail to create a document laying out how they will share profits, losses, liabilities, and work duties. Certainly, creating a detailed legal agreement can seem awkward and pre-emptive when you are in the beginning stages of dreaming up your business, but the longer you delay in creating a formal agreement, the more likely you are to run into disputes which can derail the business. The best time to figure out how you’re going to split the profits on your million dollar business is BEFORE the million dollars rolls in, not after.
If you haven’t yet created a solid, workable partnership agreement, it is better late than never to take the steps to create a valid partnership agreement that serves your needs and potentially resolve any disputes in the process.
Work With an Outside Advisor to Figure out Solutions
As in a divorce, many business disputes result from the partners’ lack of understanding of their respective rights and responsibilities. Does that mean each business partner needs to go hire a lawyer? No, and sometimes that can just start fights that can kill the business.
Instead, by bringing in a single outside advisor such as a transactional attorney who will represent the partnership as a whole, you and your partners can gain a better understanding of how the law will treat any disputes you are facing so that you can gain clarity on the situation and work out your differences.
Focus on Why You Started Your Business
This third strategy may sound like common sense, but it is often only possible when combined with the first two strategies. But when those issues are in place, you and your fellow partners can have the flexibility and freedom to return to the reasons you started the partnership in the first place: the passion you hoped to bring to the marketplace and accomplish together. Finding common ground and reinvigorating your passion while having your legal bases covered can help you resolve disputes and focus on continuing to build your business.
Legal Guidance in Building Your Business
At The Gouchev Law Firm in New York, we work with businesses of all sizes, including start-ups and franchise businesses, across New York City and New Jersey, in meeting all types of transactional needs. Call us at (212) 537-9209 or schedule a free strategy session today to see what The Gouchev Law Firm can do for your business.