Going into business with someone, or bringing a partner on after the fact can be a good thing for a company. Having a partner means having someone to share the load, physically, financially or both. What happens, though, when one’s business partner is not living up to his or her end of the partnership agreement? Such employment disputes are common in Colorado and elsewhere.
Having a nonperforming partner can put a real strain on a business and the partner relationship. How such as issue can be handled, though, will ultimately depend on how one’s company is structured. Larger corporations can use the majority rule. This is where a principal can, essentially, be voted out by stock holders. This is not how it works for limited liability companies or those who are in split ownership agreements.
So, how else can business partners go about resolving conflicts? There are three main ways. The first is through negotiation. This can be done with the assistance of a neutral third party. If the issue is resolved, a partnership agreement can be redrafted to reflect any changes made to each partner’s roles and/or responsibilities.
The second way to resolve conflict is to utilize an exit strategy. This is something that should be included in the partnership agreement. For example, a partnership agreement might state that in the event one partner fails to perform, he or she will have to sell his or her interest in the company to his or her partner. If it is in writing, it is enforceable.
Finally, the third form of conflict resolution is going to court. As this is generally the most expensive route, it is understandable that most business owners in Colorado and elsewhere would want to avoid this if possible. Sometimes, though, it is the only way to resolve a partnership dispute. Regardless of which conflict resolution method is utilized to handle employment disputes, an experienced attorney can assist business owners in resolving the issues as swiftly as possible.
Source: chron.com, “How to Deal With a Non-Performing Business Partner“, Terry Masters, Accessed on May 9, 2017