Maybe you were friends since high school or you met in a university business class. Wherever your partnership began, it blossomed into the business arrangement that has served you successfully for years. Lately, however, you and your partner are not always seeing eye to eye.
With some foresight, you may have drafted a partnership agreement early in your business relationship. That agreement can guide you as the two of you make decisions about the direction in which you want to go. If no such agreement exists, you may want to consider how you can protect your interests in case the disputes escalate into a storm.
Getting to the root of the problem
Partners grow apart. It happens. You and your associate may have differing ideas about the future of the company, or your personal lives are interfering with your work relationship. There may be another cause altogether. Some common reasons why partnerships flounder include the following:
- The business is not making a profit or struggling in some other way.
- The company has taken too much debt.
- The chosen business model isn’t successful anymore.
- There is some illegal or unethical activity within the business.
Some of these issues may be negotiable, and, with legal advice, you and your partner may be able to refocus your ideals and continue to prosper. Dishonesty or criminal behavior may be a deal breaker in your relationship. If the bond can’t be saved, you and your partner may decide to dissolve the partnership. One of you may buy the other out, or you may determine to sell or dissolve the business altogether.
Advice for difficult decisions
Whether your partnership is brand new or has survived years of business fluctuation, bringing your concerns to an attorney may be the best thing you can do for your business. An attorney can help you devise or review your partnership agreement or counsel you on your rights regarding the existing agreement.
By examining the partnership and the business’s current circumstances with your attorney, you may find that the conflicts between you and your partner can be resolved with better communication or that it is time to explore options for dissolving the partnership. With legal advice, you may have a clearer idea of the best course of action for your partnership and the future of your company.