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How to prevent litigation for business partnerships

When someone decides to start a business, that person can start the business alone or with the help of a partner, forming a bond or partnership. Some people prefer a partnership rather than a sole proprietorship as it allows them to create a bigger business because two people have more funds when they put them together than one person has alone. Business partners should share the same goal although that does not necessarily mean that they have to share common interests when starting a business.

Similar to a marriage, a business partnership can end in divorce or business litigation due to certain factors. It is important for business owners to follow some simple rules that can help them maintain a healthy business partnership. Some business partnerships involve two family members. In such cases, business partners should treat each other as business partners and refrain from speaking about family matters while they are in the office. If they are spouses, they may choose to discuss business issues only while they are in the office and refrain from speaking about business while they are home or in front of the children.

Business partners should also prepare for the possibility of their ideas clashing, which is not unusual. One partner may be focused on the details of the business while the other partner is more involved in finances. Each partner may have a different view about running the business and it is important for both partners to remain committed to their cause-making the business successful. As partners, they can create a strategy that allows them to showcase their talents, interests, personalities and core values. By doing so, each partner can communicate more effectively.

In the event that both partners want to end the business, they may choose to liquidate the assets and divide the proceeds. If one partner chooses to end the partnership, that person should be entitled to a certain percentage of the company's assets. If a partnership ends in business litigation, which often happens, it may be a good idea to speak with a legal professional. Both parties may also settle the case out of court through alternative methods, such as mediation.

Source:, "How to Start a Business with a Partner," accessed on Oct. 26, 2014

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Broomfield Office
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