Strategies for Minimizing and Resolving Business Partnership Disputes in Minnesota

Going into business with someone else can be both exciting and challenging. The energy, excitement and optimism at the launch of your venture sometimes can keep you from seeing or planning for eventual problems. And once you’re up and running, the day-to-day needs of the business can make it hard to work through issues before they build into resentments or boil over into full-blown fights. No lawyer will (or at least no lawyer should) guarantee a way to avoid all conflict, but there are things you can do to reduce the number of conflicts and to manage most of the ones that pop up.

Have a Written Agreement

One of the best things you can do is put a written agreement in place as soon as possible. The best time to do that is now, whether your business is brand new or years old. If you are just starting a business, put the agreement together as part of your launch. If you have been running your business without an agreement, prepare one. The key is to do it before disagreements invade your business; once you’re fighting about how to run the business, it’s going to be a lot harder to come up with an agreement about how to run the business.

Your agreement defines everyone’s expectations, and putting those expectations in writing will help you discover whether everyone’s are the same. You can set out, for example:

  1. Procedures for making decisions about the business: How do you bring in new investors or owners? Who decides about hiring employees? Renting or buying space? What decisions require a majority, and which ones should require a super-majority or maybe even unanimity?
  2. What authority does each owner have? How much, for example, can each of you spend without approval from the other owners? What responsibilities do you have to the business and to each other?
  3. How will you approach the departure of one of the owners? Will they be bought out? How will their interest in the business be valued? How will payments be made?

By taking the time to put each other’s expectations in writing, you make it less likely that a disagreement will grow out of misunderstandings. And when a disagreement does arise, having a written agreement will give you a road map for navigating it.

Communicating Openly and Honestly

Working through a written agreement sets a strong foundation for the future of your business because it forces you and your partners to communicate clearly, maybe about some difficult topics. While discussing the potential for legal issues and conflicts may not feel comfortable or even necessary when forming your business, doing so ensures that you and your partners are entering into this endeavor with realistic expectations and preparation. Should a dispute arise, you’ll be able to approach it from a practical standpoint, trusting that your established history of effective communication may help you resolve the matter more quickly and productively.

And while you’re writing that agreement, you might want to build in a process for dispute resolution. Early mediation can help you manage a disagreement and keep it from damaging your business or the relationship among the owners and employees.

Building a Relationship With a Business Attorney

While many business owners find themselves turning to an attorney after a legal dispute has arisen, those who have taken the time to build a relationship with a trusted business lawyer in their area are often able to navigate business conflicts with greater confidence. Consider working with a business lawyer when creating a partnership agreement or reviewing business contracts. Maintaining a working relationship with an attorney allows you to reach out to this professional at the first hint of conflict, potentially reducing the need or likelihood of costly litigation.


Learn more about strategies for minimizing business disputes in Minneapolis and St. Paul by calling Rubric Legal LLC today at (612) 465-0074.

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