When you started your California business, you were probably excited for the future and full of plans about how your business would achieve success. If you started your company with another person, you and your partner probably started out on the same page, wanting the same things and pursuing the same goals. It is not always easy to maintain a business partnership long term.
Sometimes, disagreements between business partners escalate to disputes that necessitate legal action. It is possible to take steps to avoid this situation, starting with understanding what factors sometimes make it difficult for partners to work together for the duration. You may also want to learn more about what you can do to protect the interests of your business in the event that you find yourself in a legal battle with a partner.
Reasons why it may break down
It is not easy to run a business with another person. Money trouble, fights over operational approaches, personnel issues, future growth goals and other issues can lead to significant disagreements with the other owner. This is especially common for partners who have watched their business grow and change dramatically. Some of the most complex legal and financial aspects of a partnership include:
- It is not possible to transfer one partner’s share of the business over to the other unless all remaining parties agree. This can make it difficult for one partner to leave.
- Individual partners are exposed to liability for decisions made by all the other partners as a whole.
- A partnership is not always stable because the death, retirement or resignation of one partner can immediately dissolve it.
- In a partnership, it is sometimes unclear who has authority to make decisions and move ahead with important aspects of company operations.
These examples illustrate why it is beneficial to give careful consideration before entering a partnership. If you are already in a partnership and it is no longer working, you may want to explore the various ways you may be able to protect your company and long-term stability.
The future of your business
When it is your long-term company interests on the line, you understand how important it is to handle issues with your partnership quickly and effectively. You may find it beneficial to reach out to an experienced business law attorney regarding how you can avoid litigation or fight for a successful outcome if litigation is the only option.