Many business partnerships are formed through other types of relationships, such as friendships and marriages. And while it may seem like the ideal arrangement as you get started in business together, it may quickly become clear that a solid friendship does not necessarily indicate matching ideals in business. What started out as a friendly partnership can end in bitter court battles. By getting off on the right foot in your partnership with a written agreement, you can reduce the risk for significant disputes that threaten the livelihood of your business.
Keep Everything in Writing
From the very beginning of your partnership, you should have a written agreement in place. This is true no matter whom you go into business with, even if it’s a relative or spouse. With a written agreement, you will have a solid legal document to reference for any potential points of dispute, including who has control of different aspects of the business, the obligations and duties of each partner, compensation and distributions, and circumstances under which the business or partnership may be terminated. Including terms for conflict resolution for worst case scenarios is also a smart choice. Working with an experienced business attorney, you can draw up a contract that minimizes potential pain points.
Consider Hiring a Mediator for Ongoing Disputes
If your business is already up and running, it can be difficult to come to a resolution on existing disputes that aren’t addressed in your initial business agreement, especially those involving dissolution of the partnership. Hiring a mediator can keep disagreements out of the courtroom and provide a solutions-based approach to issues that may have a variety of complex emotional and financial attachments.
Mesch Clark Rothschild provides a variety of legal services for businesses and corporate clients, including contract negotiation and enforcement and business formation and reorganization. To contact our attorneys serving Tucson’s business community, visit us online or call (520) 624-8886.
