Address partnership disputes in North Carolina before they arise

Entering a new partnership can be the start of a great business endeavor. Many entrepreneurs in North Carolina decide that by combining forces, they can introduce to the market a business that is stronger than it would be if it were a sole proprietorship. However, during the business formation process, business partners should anticipate that during the course of doing business, partnership disputes could arise. Fortunately, there are steps business partners can take from the get-go to mitigate the chance of partnership disputes occurring in the future.

First, business partners may want to execute a signed operating agreement before opening their doors or making other major life decisions in anticipation of the future partnership. The operating agreement should include provisions regarding the role each partner will play in the business, how they will be compensated and what protections they will enjoy both now and in the future.

In addition, business partners will want to include worst-case scenarios in their operating agreement. Think about the big, “what-ifs?” For example, how will conflicts between partners be handled? Could one partner remove the other from the business? Having an objective discussion about these unpleasant scenarios before they happen (if they happen at all) can make such situations run more smoothly.

In the end, partners negotiating an operating agreement should remember that they do have the option to say, “no deal.” If, through open and honest communication they find that they are incompatible as business partners, it is best that the partnership never forms in the first place. Business law attorneys can help partners negotiate an operating agreement, as well as inform their clients about the legal steps necessary to bring their ideas to fruition while mitigating potential sources of conflict.