Shareholder disputes a business partnership in Oklahoma make making goals for the business difficult. On the one hand a partnership can be a good way to operate a business. But, its important that the partners understand what they are getting themselves into. Often, one partner may have some unique talent in the industry that helps the business excel in its field. This is true while the other partner might have exceptional business or marketing abilities that contribute to the growth and success of the business.
Sometimes, though, shareholder disputes in the business can drive a wedge between partners. This disagreement might damage or destroy the business if not properly handled. Some common causes of shareholder disputes in a business include personal problems between the partners, unclear expectations and understandings of each partner’s roles and responsibilities in the operation. Still others involve financial disputes over how to handle business profits or losses. Its always best when drafting an agreement to sit down with a business lawyer who can guide you and help avoid partnership problems.
Shareholder Disputes Should Be Planned For
Often in business, partners start as friends who have things in common that lead them to want to build a successful business with their shared interests and abilities. This personal familiarity between partners might lead them to take a casual approach to planning for all the potential ups and downs of a business venture. This sometimes leaves critical matters unspoken or unresolved until they flare up into the possibility of conflict and trouble for the business.
With proper planning and preparation for a business partnership, a business will be stronger and more resilient when inevitable challenges arise. Instead of launching ahead with informal buy sell agreements on key issues, a thorough and careful consideration of the future of the business is a crucial investment in a strong and thriving business. A written partnership agreement that has been prepared (or thoroughly reviewed) by outside legal counsel is one of the best ways to avoid the potential for shareholder disputes in a partnership. This can include the initial partnership agreement together with a well drafted wind down provision in the event the partnership dissolves.
Common Shareholder Disputes
In the absence of clear written guidance on all crucial aspects of a business, problems can arise that don’t have clear solutions. Some of the most common disputes between shareholders in a partnership include:
- Questions of how work is divided and who is responsible for which parts of the business’ operations.
- One partner working far more than the other to build and grow the business, despite the fact that the profits and benefits of the business continue to be divided equally between them.
- Disagreements over spending on unusual business expenses.
- Differences of opinion on how profits should be used–will the business reinvest profits to spur further growth, hire more employees to help handle growth, or extract profits for the personal benefit of the partners?
- Death or disability of one partner, which raises questions about who will take over that partner’s share of the business responsibilities and income.
Avoiding Problems In Advance
Many common disputes between business partners can be avoided with careful planning and a clear written agreement. This agreement should set out in advance ways to resolve problems before they arise. Partners should understand the business organization structure and agree on the percentage of ownership, the split of duties and responsibilities, decision-making processes, and the agreed use of company resources and profits. If partners are equal owners with a 50/50 split of company ownership and control, it’s crucial to agree on what to do in the event of a deadlock between them over important decisions.
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Tulsa Business Partnership Lawyers in Your Corner
When disputes arise in a partnership, it is usually too late to put the issue in writing that everyone can agree to. A written partnership agreement that covers all the critical issues that can come up throughout the life of the business is essential to avoid the risk of unresolved disputes. The Tulsa business partnership attorneys at Kania Law Office know how to help you. Call or contact us online for more information and to consult with us regarding your situation