Setting up a new business is challenging. Fortunately, you do not need to go through this process alone. Many business owners choose to set up their business operations as a partnership. A partnership offers many benefits for the founders. It can be an excellent way to create a sustainable, successful, and profitable business. Of course, a business lawyer knows that a partnership will only be able to maximize its potential if the partners are able to work together.
If a serious intra-partnership dispute arises, it could potentially destroy the business. It is critical that business partners take proactive steps to prevent disputes. Further, when a dispute does occur, business partners need to know how to protect the legal rights and financial interests of both themselves and their businesses.
Preventing Disputes with a Carefully Drafted Partnership Agreement
When forming their business, partners should always have a written operating agreement. Further, this agreement should not be a standardized form of contract. Instead, it should be drafted or reviewed by an experienced business lawyer. Every business has its own unique set of needs and a good partnership agreement must be individually tailored. A list of non-exhaustive issues that should be addressed within the agreement includes:
- Day-to-day decision-making
- How disputes are to be resolved
- Details about the financial interests and contributions of each partner
- Information about compensation and distributions
- The process by which shares of the partnership can be transferred
- How the partnership can be terminated
Resolving Disputes by Work Collaboratively, Focusing on the Solutions
A partnership dispute can grind even the best company to a screeching halt. In fact, a long-lasting dispute is likely to cause tremendous damage to the underlying value of the business. Ultimately, it is in the best interests of both partners to get any disputes resolved as quickly as possible. The best way to do this is to work towards collaborative progress. By working together, and focusing on the solutions, partners can often find mutually agreeable answers.
Protecting Your Rights; Be Prepared to Exit the Business
Of course, not all partnership disputes can be resolved. In some cases, there are irreconcilable differences or competing visions. When this situation arises, business partners need to do what they can to protect their remaining value and move on. This means exiting the business as quickly and seamlessly as possible. The last thing you want to deal with is a dispute dragging on and destroying the value of the business. A business lawyer can help you dissolve your partnership in a way that will protect your interests and which will be in accordance with the requirements of state business law.
Contact a Business Law Firm Today
Having your own business can be challenging. Fortunately, you do not need to go through this process alone. Call an experienced attorney, like a new business lawyer from a law firm like Kaplan Law Practice, LLC.