Partnering with Family: Protect Yourself from Disputes

Casual business partners shaking their hands in the office

There are many famous partnerships that have stood the test of time throughout history—but many more that have dissolved. Like any relationship, partnerships take compromise and communication, and effort must be expended to see that everyone is happy. Many businesses thrive on ownership by multiple parties. This often means more capital can be brought to table, as well as energy, more hands on deck, and a wider range of ideas. When a business is family-owned, often there is a dedication and loyalty unlike no other; in fact, when you go into a partnership with one or more family members, you may feel a sense of relief in knowing that you do not have to worry about bringing in—or in some cases, employing—an outside party who may be untrustworthy.

All Business Partners Should Have Contracts

You may patronize a successful business in your area. Upon delving further to find out the secret to its success, you may discover that the establishment is family-owned and has been so for many decades. They are probably the envy of many other business owners too who are without such familial resources. And although the business may run well and profits may be rolling in, there is usually plenty going on behind the scenes that none of us know about. If you are thinking about going into business with family, don’t get so comfortable that you forget to dot your i’s and cross your t’s—after all, business is business and you just never know what might happen in the future.

A legal agreement is imperative, no matter who your partner is. Here, you can outline everything about the partnership from initial input of capital and finances overall to future expected fiscal responsibilities. To eliminate any misunderstandings later, you can also include information about what percentage of profits each party receives—and when and how.

Consider How Any Disputes Would Be Settled

A partnership agreement should include any confidentiality or non-disclosure clauses necessary, as well as an outline of work duties, if possible. Beyond that, no matter who you are working with, a conflict resolution clause is extremely helpful too, designating how any disputes would be announced to the other party, and how and where they would be resolved. While such a clause may seem unnecessary in the beginning, it could turn out to be extremely helpful later, even outlining whether or other negotiations are to be used—and who pays attorney’s fees.

Contact Us for Help

Do you have questions about drawing up or signing a business/partnership contract? Are you in the middle of a business dispute and require experienced representation? Call Shane Coons now at 949-333-0900 or email us at Shane.Coons@seclawoffices.com. We will be glad to review your case, answer your questions, and help you move forward with success.

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Partnering with Family: Protect Yourself from Disputes

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