Business partners have to manage a long-term working relationship with one another. Interpersonal dynamics can affect the overall success and stability of the company that they started together. Partners embroiled in a disagreement can create a very unpleasant work environment or they may start actively undermining one another within the company. It is therefore of the utmost importance for business partners to proactively find ways to resolve their disputes as soon as possible.
What are some of the solutions available for those who disagree with their business partners about issues important to the company?
1. Negotiating about the disagreement
In some cases, partnership disputes require negotiations. Partners may disagree about whether it is appropriate to sell the company or who to hire for a vacant position. Having a sit-down negotiation session can sometimes lead to a workable solution for the partners.
In scenarios where the conflict has proven difficult to resolve, they may need to review their initial partnership agreement and business formation documents to help guide the negotiation process. Working with lawyers can allow partners to put together binding agreements that they can sign after successful negotiations to ensure they follow through with their promises to one another.
2. Proposing a buyout
Sometimes, the disagreements between business partners make it clear that they can no longer maintain a healthy working relationship. In such scenarios, one partner may decide that they want to acquire the ownership interest of the other.
They can offer a reasonable amount of compensation to acquire their partner’s share of the company. Buyout scenarios allow for mutual benefit and can result in one party taking full control of the business, thereby eliminating disruptions in operations caused by partnership disputes.
3. Dissolving the organization
Occasionally, partners cannot reach amicable solutions to their disagreements. Particularly in scenarios where there has been egregious misconduct and violations of trust, continuing to work together may not be a viable option.
Neither partner may have the resources or capabilities necessary to run the business alone. Partners can sometimes agree to dissolve the organization. By ending the partnership, both partners can free themselves from ongoing obligations to each other. Dissolution may require extensive negotiating, as partners may need to liquidate assets and share any proceeds generated by that process.
Exploring different solutions for resolving partnership disputes can help frustrated business owners find the right path forward. In some cases, salvaging the working relationship between the partners may be the best possible outcome. In other cases, ending the working relationship and minimizing personal exposure by pursuing business litigation may be the best outcome available. Having a plan and seeking legal guidance can help partners resolve a dispute that is causing operational disruptions.