Preventing Partnership Disagreements Starts Before The Union
As an attorney experienced in commercial law, Brentwood-based Brian T. Boyd sees his fair share of partnership disputes. Unfortunately for those involved, hiring an attorney after a problem arises is an expensive endeavor. But there are ways to stop conflicts before they start. Keep reading for tips.
Hire an attorney to draft your partnership agreement.
According to Boyd, this is the most important step a small business owner can take. Look for an attorney that specializes in commercial law. Many Brentwood business owners skip this step, naively assuming that their friendship or past business dealings is enough to solidify a partnership. It is not, and having legal counsel on hand from the very beginning means that all of the details are in writing. A lawyer will clarify expectations on all sides and ensure everyone involved fully understands their rights and obligations.
Draft a preemptive buyout agreement.
A buyout agreement is a binding document that directs what happens when one partner dies or chooses to leave the business. This form is also used to initiate a buyout when a partner is not performing their expected duties. Buyout agreements are written to adhere to national, state, and, locally, Williamson County, and Brentwood city regulations. A commercial law firm will know these and make certain that each party is aware of scenarios in which their partner can force a buyout.
Make the hard decisions ahead of time.
It is easy to think of a small business partnership as something that stays that way. Ideally, however, the company grows. With this expansion comes growing pains and tough decisions. Run through future possibilities and clarify which business decisions each partner is entitled to make alone and which requires collaboration.
Leave nothing to a handshake.
A handshake is an excellent way to meet and bond, but verbal agreements are not ideal from a commercial law standpoint. In Brentwood, a business partner is legally obligated to fulfill the terms of an oral agreement but, proving these terms is often difficult, if not impossible. Boyd strongly suggests getting even seemingly small details in writing to circumvent a dispute. This has a twofold benefit. First, it provides an opportunity to go deeper into detail and clear up any unknown misunderstandings by either party. Second, having a written agreement makes it easier to settle disputes if they arise.
Know what to do in case of a disagreement.
Even if you leave nothing to chance, there might be a time when you and your partner(s) do not see eye to eye. Know what to do in these cases, and begin the conflict resolution process swiftly. Start by trying to work things out without involving legal counsel. If things get too heated, contact your attorney. Do not take things personally, and remember that everyone’s end goal is to ensure minimal disruption to day-to-day business.
Brian T. Boyd is a Brentwood attorney that specializes in tax and commercial law. He is available for partnership consultation and business litigation if the need arises.