You have several business structures to choose from when creating your business. For many, a partnership makes the most sense, because it allows them to retain a significant amount of control over the business while allowing them to maximize their profits. Despite these benefits, there can be real challenges to a partnership, especially when you and the other partners find yourselves in a dispute over operations and other business-related issues. But don’t let this dissuade you from considering a partnership. After all, there’s a lot you can do to prevent these issues from arising in the first place.
How can you avoid a partnership dispute?
A strong partnership requires a lot of preparation in the business structuring process. Here are some steps that you might want to take to prevent a disruptive partnership dispute from arising:
- Clearly specify each partner’s obligations and responsibilities while making their role within the business abundantly clear.
- Discuss worst case scenarios with your partners so that you can develop a consensus on how to handle those issues before they arise.
- Create a decision matrix that can help give guidance when you and your partners disagree on a course of action.
- Identify an alternative dispute resolution strategy so that if you and your partners can’t hash out a dispute on your own you can turn somewhere for help resolving the issues at hand.
- Continue to remain in constant communication with your partners so that you can hopefully work out any lingering disputes before they fester into something more severe.
Protect your interests and protect your business during business formation
There’s a lot to think about as you create your business. Don’t overlook issues that could potentially arise in the future and ways to address them upfront. By being thorough here, you could better position your business for the success that you envision for it.