When business partners are working together in agreement on things, the business can hum along smoothly and even achieve incredible accomplishments. That being said, business partnership disputes can throw a major wrench into the operations of the company. Below are some tips on how to handle a business partner dispute appropriately.
Understand the Rights That You Have
You may need to analyze your LLC operating agreement, partnership agreement, or corporation’s bylaws to determine what rights you have. These clarify who owns what portions of the business, how losses and profits are allocated and other issues related to ownership interests. This will give you the legal framework for your discussions with your business partner.
Determine What You Really Want Out of the Situation
Identify your ideal solution in this particular circumstance. It may not be possible for the other party to comply completely with what you request, so you need to think of multiple options for cooperation and compromise. Are you looking for a way to reduce the conflict so that you are able to work together? Are you looking to resolve a specific issue so that you can move on and focus on profits? Do you want to buy the other individual out at fair value or do you want to sell the whole business? All of these are important questions to consider when you have a dispute with a business partner.
Identify Whether Operational Changes Can Assist with Resolving the Dispute
One of the most common reasons for differences between business partners has to do with new direction within a business or a new source of vitality. Sometimes, altering your operations can help to minimize conflict between two parties and allow the business to move forward. Thinking about these solutions before you have the initial conversation with your business partner can be extremely beneficial.
Prepare to Keep the Business Running
In the event of a dispute, you want to minimize the impact that a dispute has on the company, so it may be a good idea for you to consult with an Arizona business litigation attorney to determine whether you need to take legal action if you are not able to resolve things on your own. Understanding that a business partnership dispute can have a significant impact on your operations and your profits, you may need to consult with an attorney sooner rather than later.
This blog should be used for informational purposes only. It does not create an attorney-client relationship with any reader and should not be construed as legal advice. If you need legal advice regarding How to Handle a Business Partner Dispute, or any other litigation matters, please feel free to contact Roger C. Decker at 480.461.5343, log on to udallshumway.com, or contact an attorney in your area. Udall Shumway PLC is located in Mesa, Arizona and is a full service law firm. We assist Individuals, families, businesses, schools and municipalities in Mesa and the Phoenix/East Valley.