Business partnerships are a lot like marriage. The initial phase is the honeymoon, then there are phases where things settle, and there may be a point where interpersonal problems challenge a once-successful arrangement.
Sometimes the partnership encounters irreconcilable differences where the only way forward is to buy out a partner, sell the business or dissolve it. However, there may be many worthwhile elements to the company that make the partnership or business salvageable. These four steps may help the partners determine what they want to do:
- Communication: The partnership may have fallen into a rut of little communication beyond coordinating deliverables. If they agree, partners can set aside time set to discuss issues or grievances. This should not be an opportunity to engage in petty or harmful behavior.
- Review options: The partnership agreement should outline some options when there is a dispute between partners. Those involved may want to look at what happens if they choose to dissolve the company, what the business needs to do to meet its obligations and any complications or benefits to either maintaining or splitting up the business.
- Actionable decisions: This process of talking through the issues may have reinvigorated the partnership or solidified its need to end. Hopefully, there can be a mutually agreed-upon strategy to sell the business, keep it, dissolve it, file bankruptcy, or try arbitration.
- Legal action: If this is no agreement about what to do, it may be a time to speak with an attorney about protecting one’s own business and financial interests, particularly if there is perceived to be a breach of fiduciary duties, misappropriation of assets, fraud, or failure to meet obligations.
