Tag: Business partnerships

Business strategies

Business Strategies: Figure out Partnership Exits at the Beginning

While some business owners employ many different business strategies and some prefer to fly solo, many others find that their companies thrive with the boost of one or more partners; in fact, if you do have business partners, these could be individuals you have known for many years—and they may have been integral in helping to develop your business model, products, intellectual property, and more. The key to a successful business partnership is much like that of any relationship: communication is key, along with a clear outline of what is expected of everyone.

Speak to your business attorney as soon as possible about having partnership contracts drawn up, defining titles, delegated duties, and information regarding profits and how and when they are to be dispensed. Even more important though is the exit strategy. And although this might seem like a negative thing to be considering from the beginning, the reality is that many partners do go in different directions over time, and it is better to have a plan while everyone is on good terms. This gives stability for the future too, as everyone knows what the plan is should one partner or another wish to depart or sell their shares.

The exit strategy for partners should include establishing the value of the business and then giving one or more partners the right to buy out their shares if that was the agreed upon plan; otherwise, they may want to leave their shares to family members or sell them to individuals from outside the company—a move which could lead to surprising complexities for existing partners who may later wish they had taken the chance to buy out the exiting partner.

Another important quotient in the business partnership contract is a dispute resolution clause. Again, deciding on such details before anyone is angry or suing can lead to a much better outcome later should a dispute arise. Dispute resolution clauses can be extremely detailed, outlining what type of method would be used, whether litigation, arbitration, or mediation. They may also be used to indicate where the resolution would take place, and who would be responsible for paying any attorneys’ fees, should that be an issue.

Do you need legal assistance with a business dispute? If so, contact the Bolender Law Firm.  Our attorneys are experienced in representing clients in state and federal courts, at both the trial and appellate level. Call us at 310-320-0725 now or submit an easy consultation request online. We are here to help!