Safeguarding Business Relationships When No One Agrees

Running into disagreements with your business partners can be among the most challenging aspects of running a successful company. Even when everyone shares a common interest in finding a way forward, business partners can have very different opinions about what is in their company’s best interests or how their rights and responsibilities should be divided.

So, how can you move on?

Safeguarding business relationships when no one agrees often requires a measured approach. To keep the company (and the partners’ business relationships) intact, the partners must be able to find a mutually agreeable path forward. While litigation is always an option, it is rarely the best option in this scenario. In most cases, a negotiated resolution will serve the best interests of all parties—and simply getting everyone to acknowledge this fact can help set the stage for a positive outcome.

What Does the Shareholder, Partnership or Operating Agreement Say?

When dealing with an internal business dispute, the first step is usually to look at the shareholder, partnership or operating agreement (depending on whether the business is a corporation, partnership or limited liability company (LLC)). There are three main reasons why:

• The Agreement Should Define the Partners’ Respective Rights and Responsibilities – A well-crafted agreement will establish the partners’ respective rights and responsibilities with regard to capital contributions, distributions, management of the company and other core business matters. If any terms of the agreement are relevant to the dispute at issue, this could facilitate a swift resolution.
• The Agreement Should Address Dispute Resolution – If the agreement does not provide clear guidance regarding the subject matter of the partners’ dispute, then its dispute resolution provisions will come into play. It is fairly common for agreements to require good-faith efforts to negotiate an amicable resolution, followed by mediation or arbitration (or both) if necessary.
• The Agreement May Specify Remedies or Dictate a Certain Outcome in the Event of an Impasse – Some agreements will also specify remedies or dictate a certain outcome in the event of an impasse. If one partner will be subject to a buyout, for example, this could provide the impetus needed to negotiate a mutually satisfactory resolution.

Finding a Mutually Agreeable Path Forward

It’s worth noting that getting attorneys involved can help, too. Oftentimes, business partners will be emotionally invested in the success of their company—and understandably so. But, in the event of a dispute, this can cloud their judgment. Getting attorneys involved can help ensure that everyone keeps a level head, that everyone has an accurate understanding of their respective rights and responsibilities, and that the partners consider all viable options for resolving their disagreement.

Speak with a Business Dispute Resolution Attorney at Rendigs

If you are dealing with a dispute within your company’s ownership, our attorneys can help. We have extensive experience helping business partners resolve disputes without resorting to litigation. To discuss your dispute with an experienced attorney in confidence, please call 513-381-9200 or tell us how we can help online today.