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Business partnerships on shaky ground

On Behalf of | Jan 14, 2020 | Business Law |

The idea of having a partner in your business venture may have developed as you explored your options and developed your business plan. On the other hand, it is possible that the original idea for your venture included a partner, and together you built your business model. No matter how a partnership starts, there is always the risk that it will end badly.

A lot is on the line when two or more people go into business together. Like a marriage, a business partnership is made of people with differing personalities, strengths and weaknesses. While every partnership has its own dynamic, there are common reasons why many partnerships end in disputes.

Is your partnership at risk?

Going into business with someone else can be rewarding, and a strong partnership agreement can keep it that way indefinitely. Partnership disputes often mean the end of a business, and this can mean financial setbacks that are difficult to recover from. If you are in a partnership that is struggling, it may be for any of the following or other reasons:

  • You and your partner were not able to separate your personal relationship from your business relationship.
  • One partner made a significant financial contribution and does not believe the other has contributed an equal amount of sweat equity.
  • One of you feels he or she is more committed to the business than the other.
  • You or your partner is becoming discouraged or second-guessing business decisions because the company is not having success.
  • You and your partner have different visions or objectives for the company or divergent reasons for starting the business.
  • There has been a breach of trust between you, such as one partner engaging in illegal or unethical practices within the business.

Of course, many times opposing personalities can create a conflict between partners. This may sound simplistic, but personality can determine whether you and your partner share the same tolerance for risk, have the same expectations or are willing to persevere when things are difficult. Personalities also determine how each of you deals with employees, vendors and clients, which can make or break a business.

A dispute with your business partner does not have to mean the end of your business. You may have options for resolving the issue and moving forward successfully. Reaching out for answers to your questions is a step in the right direction. A New Jersey attorney may be the right resource to help you.