Operating a business in Minnesota can be lucrative when everything is going as planned. However, if you’re involved in a partnership, disputes can arise between you and one or more partners, making it challenging to move forward. Opening a clear line of communication and planning ahead with a solid partnership agreement are two excellent ways to avoid confrontation and costly business litigation.
Forming a solid partnership agreement can be helpful
Creating a partnership agreement can be helpful when you’re operating a business with other individuals. At a minimum, you will want to include the following:
- Business outline – An outline that explains each business element and how each partner is expected to manage. Having these criteria written down should reduce confusion once the business is operating.
- Clear responsibilities – These elements can include business management and oversight and the personal responsibilities for each partner in terms of capital, liabilities and profits and losses.
- Form of mediation – This element avoids confusion when mediation is required to resolve a disagreement.
Listing all of the expectations and responsibilities for each partner makes each role in the business clear and transparent. Each partner should know what needs to be done to fulfill their duties. Other elements of a partnership agreement can include the following:
- Ownership interest
- Profit and loss distribution
- Management and voting
- Adding or removing partners
Taking time to listen to each other can be critical in solving a dispute
Rushing to judgment may escalate a disagreement between you and another partner in your business. Taking time to sit and listen to their position is best in this situation. Actively listening to everyone involved can help ease tensions and make it easier to find a solution.
Knowing how to handle a partnership disagreement before it occurs can be beneficial. If you’re in a position where this action is too late, listening to the other side is an essential way to get through it in a positive manner.