When you created your business, you might’ve thought that you had every kink worked out and every contingency under consideration. But as time rolls on, you’ve probably found that new issues come up, priorities change, and business decisions are more difficult to make. For those in a partnership, these issues can be multiplied and, if you’re not careful, these partnership disputes can threaten the viability of your business’s future.
How can you resolve partnership disputes when they arise?
To start, you should do everything you can to prevent partnership disputes from becoming problematic in the first place. You might be able to do this by crafting a thorough partnership agreement, using a decision matrix, and ensuring ongoing communication even in difficult times. Beyond an iron-clad partnership agreement, here are some ways resolve a partnership dispute:
- Mediation: Although you might’ve pictured talking the issue out with your partners, in many instances that just simply isn’t possible. You might need an outside perspective to help you and your partners navigate the issue at hand and find a compromise. A neutral mediator might be able to help you do that by facilitating effective communication and understanding.
- Enter into a buyout agreement: If there’s no way that you and your partner are going to be able to resolve your differences, then it might be time for someone to leave. In these instances, you might be able to negotiate a buyout agreement that removes the problem while ensuring that the individual who leaves the business is appropriately compensated. If you want to pursue this option, then look back at your partnership agreement, as it may contain a buyout provision.
- Sell the business: Amid your partnership dispute, it might become apparent that none of the partners want to remain in the business. If that’s the case, then you should look for buyers and get out when the time and price is right.
- Dissolution: Another option for your business when a partnership dispute can’t be resolved is closing the business. You and your partners might agree on how to wind it down and dispose of assets, but when even these matters become contentious you may have to turn to the court for help.
- Litigation: If your partnership dispute arises from some sort of misconduct (such as misappropriation or company assets or embezzlement), then you might have to take legal action against your partner. Many times, this is the only way to recoup lost funds and save face with your business’s clients and the public at large.
Although there are several larger strategies that you can deploy when you try to resolve your partnership dispute, there are key things to focus on as you move forward. This includes:
- Finding effective ways to communicate
- Removing emotions from the equation
- Identifying common ground
- Focusing on the business’s interests
- Honing in on the root cause of the issue
This is all easier said than done, but with some diligence, you can and will get through the issue confronting you, one way or another.
Act now to take care of your partnership
A partnership dispute can be like a tumor that grows until it cannibalizes your business. You don’t want to wait for it to get out of control before you address it. That’s why now is the time to act. To learn more about how to proceed with your case, continue to read our blog and the rest of our website.