What is the best way to save or dissolve a business partnership?
A partnership dispute can lead to a stressful and possibly expensive lawsuit if certain steps are not taken. To save or dissolve a business partnership with the least amount of hassle, take these steps.
Business partnerships can be complex and that's why it's important to have a well-constructed partnership agreement.
A partnership agreement should provide the partners guidance when it comes to disputes. Taking the time to draft a partnership agreement wills save business men and women many headaches down the line when they inevitably disagree with their partners over a business issue.
A partnership agreement will provide protection to the parties involved and hopefully, if constructed well, give the partners the guidance they need to resolve the matters civilly.
Without a partnership agreement, both parties will have to navigate the complex legal issues on their own. Business partners who do not have a partnership agreement will need to try to work through their dispute and see if they can resolve the matter on their own. They will need to evaluate the cause of the dispute and determine what steps they need to take to resolve the problem. Sometimes issues arise that aren't easily identified without further communication. For example, if one of the partner's issues is due to family problems, the other partner would never know that unless they spent the time investigating the root of the matter.
Some business disputes cannot be resolved. In these cases, the partnership may need to be terminated. An example of this would be if one partner stole money from the business and lied about it. Other issues, however, such as the structure of the business, can be worked on.
A partnership agreement can outline how to handle the business in certain situations. If one partner wanted to leave, the agreement might stipulate the terms under which the other party would buy out their share of the business. Having a partnership agreement can be invaluable, but it should also be looked at and updated periodically as the business grows and changes. This requires strong communication on the part of both partners. This will create a better business relationship between the partners at every step.
A partnership agreement does not guarantee that the business relationship will be conflict-free. Many partnership disputes are over breaches of contract. In these cases, a partner will need to seek legal advice from an experienced attorney. An attorney can take the emotion out of the situation and assist with negotiating a resolution.