We write and speak often on business partnership, especially the 4 Ds (death, disability, divorce, and disagreement), which can have a significant impact on your businesses.
We talked about in previous blogs about business divorce and why business partners may disagree. We described some examples of conflict that business owners may experience and what they can do to protect themselves and the value of their business in the event of a business break-up or disruption. We regularly conduct workshops titled structuring partnerships to help business owners become aware of these issues. Shawn McBride’s new book titled “Business Blunders! 10 Dangerous Business Mistakes and How to Protect Your Business So It can Thrive!” also addresses the 4 Ds and how to avoid them.
In this blog series, we will look at some recent cases involving disagreement among business partners to show how things may work out in the real world and what they could have done to diminish the risks of a messy business divorce. In these cases, you will see that many of the problems stem from the lack of a well-drafted operating agreement, tailored to the parties’ needs, that spells out each business partner’s rights and obligations with specificity, as well as the failure to retain separate legal counsel to represent each business partner. While these might not seem necessary when you are just starting out or when things are going smoothly with your business partner(s), these cases will serve as a warning to remind business owners that it’s always better to prepare than to regret.
This post was the first part of our multi-part series on business partnership, disagreement, and dissolution. You can find the other posts by searching our blogs.
This posting is intended to be a tool to familiarize readers with some of the issues discussed herein. This is not meant to be a comprehensive discussion and additional details should be discussed with your attorneys, accountants, consultants, bankers and other business planners who can provide advice for your circumstances. This article should not be treated as legal advice to any person or entity. Freeimages.com/Photographer Ales Cerin.
About the Author
Shawn McBride — R. Shawn McBride is the Managing Member of The R. Shawn McBride Law Firm, PLLC. Shawn works successful, private business owners in their growth and missions to make a company that stands the test of time. You can email R. Shawn McBride or call (214) 418-0258.
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