Preparing for Business Disputes

This week, my Forbes article will be focusing on disputes among business partners.

Business owners often get into trouble when they don’t plan for potential disputes with their partners.  At the outset of every new business venture, business relationships tend to be all smiles and cheery attitudes.  But, every relationship can take a bad turn, and business relationships are no different to personal ones.

Wise business owners plan for these sorts of events in advance.  What happens if your partner gets sick, or dies, or you simply a have a falling out on the way the business is being run?  What happens if you want to sell the business and your partner doesn’t?  If these sorts of issues are left to address when they occur, they can often bring a business to its knees.

Buy-Sell AgreementInstead, consider engaging a lawyer to prepare a Buy-Sell Agreement.  These agreements are often considered to be a sort of “business prenuptial” or “business will” agreement.  They set out a plan for handling disputes or other problems in advance.

These sorts of agreements can be relatively simple or add a significant amount of complexity to handle the actual repurchase of shares from a partner.

Here are a couple of resources if you are interested in learning more:

Buy-Sell Agreement FAQ (Nolo Press)
Understanding Buy-Sell Agreements (The CPA Journal)

Better to prepare now than suffer the consequences later!

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