This blog commonly talks about business litigation and business partner disputes. Indeed, a recent blog post discussed common business partner disputes. In this blog, we will focus on resolving two common disputes: monetary and operational.
Just like divorcing couples, where money is often at the heart of a business dispute, business partners also routinely disagree on money, especially when one is accused of embezzlement. Indeed, in most partnerships, one person handles the money and the other the operations, the one controlling the money often will do things that the other partner does not know. Now, this could be completely normal, or it could be inflating costs or expenses.
So, how do we solve this? Clear ownership rules, drafted and agreed to upfront, is the first step to solving these issues before they start. These should include, ownership interests, salaries, dispersal timelines and accounting practices. Then, having post approval processes, where both partners agree, can help avoid disputes as this will be give both partners an opportunity to ask questions. Remember, disbursements can have tax implications, so these should be understood by both partners to avoid disputes. Unfortunately, especially when embezzlement is alleged, an accountant and lawyer will likely be needed to resolve the dispute and help the business move forward.
Most partnerships begin on equal intentions and equal work. Though, over time, disagreements can occur and one partner may begin doing more work than the other, or, at least, perceive that they are doing more than the other. Partnership responsibilities should already be laid out in the operating agreement, but if not, then just be honest with each other and try to reach an amicable resolution. Put pen to paper and redistribute tasks, if needed, or maybe propose some kind of offset or increased salary. After all, as businesses grow and expand, so do the tasks required to operate those businesses. If a resolution is not possible, bring in a third-party. This can be a new investor, partner or an attorney. They can help resolve the dispute and how to move forward.
Business partnership disputes can be resolved prior to business litigation. However, even before one decides that commercial litigation is needed, call a Bloomfield Hills, Michigan, attorney. The attorney can, perhaps, help solve the issue without litigation, but if litigation is needed, they can proceed as needed.