Business

What To Do If Your Business Partnership Becomes Untenable

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Unfortunately, business relationships can disintegrate and very quickly in some cases. This can happen for a variety of reasons from too much financial burden and stress to having a different vision for the company going forward as well as personal relationships. In the event that this happens with two majority shareholders it can cause huge problems for the business and in the long run it is better to cut ties as quickly as possible for the greater good of both parties. By dragging out contentious issues you simply risk running the business in to the ground and nobody getting anything out of the process. It is surprising how quickly trouble at the top of a business trickles down all the way through it, leading employees to take sides and overall productivity dipping.

So what are your options in this scenario? The first is to start legal proceeding against your business partner, this could be for a variety of different reasons if you believe they have been negligent in some way or they have threatened to ruin the company, in this scenario if you were a Manchester based business, you would need litigation solicitors in Manchester to act on your behalf through the legal process. Often this is the most destructive way to proceed and should be avoided wherever possible.

The second option is mediation, hiring a mediator to talk through issues that you have and provide a platform to meet in the middle and give a path forward. This should always be the first port of call as it enables you to move forward in an amicable manner with a formal agreement in place. Of course, the only issue with this is if you are very far apart in your thinking, you are going to run in to daily issues you don’t agree on and therefore you will spend a large amount of time in mediation or it simply won’t work. This kind of approach works best if the reason behind the issues are more to do with vision.

The final option is to simply go your own separate ways, one person buy the other person out of the company and then they can run it the way they would like to, the other can then use the money they have received to set up their own company and run that how they would like to. This can often be the best solution in the long run but can pose issues when it comes to the value of the company and whether one partner can afford to buy the other partner out.

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