Starting a business with a partner allows you to combine your skills, resources and ideas. However, working with another person can open the door to disagreements, some of which lead to legal conflict. What issues might impact your business?
1. Finances
Disagreements about money are common. Partners might argue about how to spend or manage funds, leading to fights over budgets, expenses and profit sharing. In some cases, one partner may even make choices for the business based on their own financial interests.
2. Roles and responsibilities
If partners are confused or disagree about their roles, conflicts can arise. Without clearly defined roles, partners might interfere with each other or not do their jobs well.
3. Making decisions about the business
Fights can occur when partners disagree on business decisions. Without a clear decision-making process, partners might be unable to move forward.
4. Exit plans for partners
Partners should discuss what happens if one wants to leave. Disagreements over buyouts, value of the business or ownership transfers can create complicated disputes.
5. Intellectual property
If a business invests in innovation, partners may face conflict about that intellectual property created during the partnership. Disagreements may arise if partners don’t agree on who owns what or how it should be used.
6. Violations of the partnership agreement
Legal conflicts often happen when a partner thinks another has broken the partnership agreement. This can include not doing their job, misusing company resources or breaking non-compete rules.
You can protect yourself and your company
Legal conflicts between business partners can be tough, and it is easy for these disagreements to lead to litigation. By dealing with these common issues early and working with an experienced attorney in a lawsuit, partners can protect their interests and the business despite challenges.