A business partnership is like a marriage; it should remain steady no matter what obstacles come your way. However, things don’t always go according to plan. Married people divorce, and partnerships dissolve. It is common but not inevitable. You can prevent a dissolution if you act now.
How can you keep your partnership healthy?
A robust partnership agreement that includes how to deal with differences of opinion in addition to outlining duties and profit division is an excellent way to stop problems before they start. If you are already in business and have an existing agreement with loopholes, consider amending it with the help of an experienced lawyer.
How to handle conflict
As you have a legal arrangement, you require a legal resolution. No matter what the dispute is about, you need to involve an attorney. Your livelihood and assets are at stake. The point of conflict could be any number of things, from actual criminal behavior on the part of your partner to a conflict of interest to a disagreement that is causing productivity problems.
If you have suspicions or issues with your partner that go unresolved, the consequences for your company could be severe. You have rights that Minnesota law requires all partners respect, and it is up to you to take advantage of that privilege.
Your rights include:
- Shared information. The law requires that your partner inform you of all developments related to your business. Is your partner open with you?
- Non-compete clause. In many cases, though not all, a partnership agreement mandates that all partners respect the integrity of the business by abstaining from doing any work on the side that the shared company performs. Does your agreement include a non-compete? Is your partner infringing on your revenue potential?
- Equitable pay. Are you getting your share of the profits? Are your expenses covered as outlined in your partnership agreement?
- Shared responsibilities. You and your partner have designated duties, and the division should be equitable. Are both partners pulling their weight?
- Joint decision-making. Is your partner making significant decisions without your consent? This is not legal and can break a partnership.
The business you share is as much yours as it is your partners. You both have your roles to perform. If you cannot resolve your disputes amicably, then find a mediator in a lawyer who can interpret your partnership agreement and protect your investment.