3 Secrets to Solving Disputes in a Partnership
If you and your partner get along well, the partnership will flourish and so will your business. However, as we are all human, sometimes partners may get into arguments and hit a brick wall. When you and your partner do not get along, the business suffers, your employees suffer and you both suffer as well. As some arguments are unavoidable, we will give you the three secrets to solving disputes so that you and your partner can get on with your lives and continue working together.
- Have a dispute resolution mechanism in your Operating Agreement. An Operating Agreement is a contract between you and your partner that specifies how the partnership will be managed, how to add additional partners and how to resolve disputes, along with much more. It is crucial that your Operating Agreement has a dispute resolution mechanism because it will help you determine how you can solve disagreements. If you wait to determine this mechanism after you are in a dispute, then the mechanism will become a point of contention as well and this can lead to even more disagreements. Understanding how you will need to solve disputes before they start is also advantageous because it will help you understand your partner’s stance on certain issues. Dispute resolution mechanisms may include mediation or having a trusted advisor determine the outcome of the issues.
- Have a values agreement. A values agreement is an agreement between you and your partner that states why you are opening your company and what values you will hold and enforce. A value agreement is an excellent way to familiarize your partner with your views toward business and how you would like to run it. The following is an example of a values statement: our first priority is ensuring that our employees are happy and taken care of. These statements will help resolve disputes as you can look at those values to see what decision you should reach.
- Have an attorney. In the case of a dispute reaching a phase where you are worried that your partner will steal clients or leave, having an attorney will help protect both you and your company. An attorney can help you stop your partner from stealing trade secrets or employees. Furthermore, an attorney can help you resolve disagreements with your partner by explaining the Operating Agreement or providing you with a fresh insight.
We hope that the three tips above have helped you understand how disputes or disagreements between partners can be solved.