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Can you keep a partnership dispute from destroying your business?

On Behalf of | Jul 4, 2024 | Business Litigation

A business partnership can be a blessing – unless it turns out to be the wrong partnership for either of you. 

When a business partnership fails, one of the major concerns you may have is how to keep your business from suffering the fallout. If you don’t want the end of your partnership to destroy what you’ve worked so hard to build, here are some tips:

Plan for the end from the very beginning

One of the most critical things that you can do is to discuss your vision for ending the partnership with the other party before you even enter into an agreement in the first place – because all business partnerships eventually end, whether that’s because someone retires, dies or simply wants to move on.

A buy-sell clause should be included in every business partnership agreement that spells out each party’s expectations for the future, explains the “triggers” that can put such a clause into effect, designates the way the business will be valued and discusses payment terms. When everybody knows what is expected, it’s much easier to transition.

Have a social media and press release clause

Nothing can damage a company’s reputation faster than an explosive “war of words” on social media or a smear campaign waged through press releases. 

While you may not picture your business partner stooping to such lows, it’s better to have a written agreement that controls what can be said in public about the other – or the business itself.

Be honest with your key employees

The success of your business operations may rest heavily in the hands of a few key employees – so don’t keep them in the dark about what is happening. The last thing you want is for a “linchpin” employee to sense that the business is in trouble and leave for a competitor when you’re already in crisis.

Leveling with your key employees about the partnership dispute, without disparaging the other side, can make it possible for you to enlist their assistance to keep the operations stable during this time. 

Business partnership disputes can happen, and tear apart formerly positive relationships. When that happens, it’s important to get legal support as soon as possible.