No one knows what it’s like to have a bad business partner until they’ve experienced one. Dealing with an uncooperative, uncommitted, or just downright hostile partner can be daunting. If you find yourself in this situation, don’t despair. You can take steps to minimize the damage and protect your business. Here are some tips.
1. Define the problem.
Before you can address the issue, you need to identify what the problem is. Is your partner not pulling their weight? Are they constantly disagreeing with you? Do they make decisions without consulting you? Once you’ve pinpointed the source of the problem, you can start to look for a solution.
Sometimes, the problem is simply a matter of communication. If you’re not on the same page, it can be challenging to work together effectively. After acknowledging the situation, sit down with your partner and try to hash things out.
2. Talk to your partner.
It may seem obvious, but the first step in dealing with a bad business partner is to talk to them. This can be difficult, but it’s essential to try to resolve the issue directly. You may need to involve a third party if you cannot agree.
An excellent way to approach the conversation is to start with a positive comment. For example, you might say, “I appreciate your help with the business. I know we’ve been having some difficulties, and I wanted to talk to you about that.” This will help put your partner at ease and make them more receptive to what you say.
You should also avoid attacking your partner or putting them on the defensive. Instead, focus on finding a solution that works for both of you. You want to come out of the conversation with a plan you can agree on.
3. Consider mediation.
If you cannot resolve the issue, you may need to seek outside help. Mediation is a process where an impartial third party helps two sides agree. This can be an effective way to handle disagreements between business partners. While most mediators are lawyers, you can also find trained mediators in conflict resolution.
You can resolve many disputes with the help of a mediator. If you’re unsure whether mediation is right, consider talking to a lawyer. They can help you understand the process and decide if it’s something you should pursue.
4. File a lawsuit.
When all else fails, you may need to take legal action. This should be a last resort, as lawsuits can be expensive and time-consuming. If you do decide to file a case, you should consult with a lawyer. They can help you understand the process and what to expect. Ask about the costs involved and how long the case will likely take.
When filing a lawsuit, there are many processes involved. For example, if your business partner is out of state, you may need to hire a process server that offers a service for domesticating subpoenas nationwide. This is a process where you request that the court in your partner’s state recognize a summons from your state. This can be a complicated process, so it’s essential to have a lawyer who can help you navigate the system.
There is also the discovery process, where each side gathers evidence. You can do this through depositions, interrogatories, and requests for documents. The discovery process can be lengthy and expensive, so it’s essential to be prepared.
5. Protect your business.
If you’re in a situation where you can’t trust your partner, it’s essential to take steps to protect your business. This may mean keeping them out of important decisions or creating a buy-sell agreement.
A buy-sell agreement is a contract that stipulates what will happen if one of the partners wants to sell their shares of the business. This can help prevent your partner from selling the company without your consent. It can also spell out what will happen if one of the partners dies or becomes incapacitated.
This agreement should be created before there is any disagreement between the partners. That way, everyone is on the same page, and there is no confusion about what will happen if the relationship ends. You can also put other provisions in the agreement, such as what will happen if one of the partners wants to retire.
6. Dissolve the partnership
Finally, if you cannot repair your relationship, you may need to dissolve the partnership. This is a process where the business officially ends and the assets are distributed.
If you decide to dissolve the partnership, you should consult with a lawyer. They can help you understand the process and what to expect. You’ll also need to officially file a notice with the state to end the business.
Dealing with a bad business partner can be difficult, but taking action to protect your business is crucial. If you cannot resolve the issue through mediation, you may need to take legal action. This should be a last resort to avoid expensive and time-consuming lawsuits. Talk with a lawyer to understand your options and take steps to protect your business. You can prevent a difficult situation with your business partner with suitable precautions.