Much like fairy-tale romances that turn into unhappy marriages, there may come a time when what once seemed like the ideal business relationship between two company owners starts to unravel. Sometimes the process is slow and civil, and other times it may become reckless and ruthless with both sides fighting for what they feel is rightfully theirs.
As with any former union, even business partners must decide “what’s next?” when arguments have taken the place of civil conversations and mutual agreements can no longer be made. If it seems unlikely that both sides will be able reach an amicable agreement, a third party may be necessary to help facilitate future conversations. And, just as former spouses hire divorce attorneys to represent them, business lawyers are often key when companies start to fall apart from the top.
According to Spiro Komninos, an experienced business lawyer in Tampa, Florida, there are a number of situations in which business partners who can no longer agree have called upon the services of attorneys. Most commonly, he says, a problem arises when two business partners who were once very close-knit are in a deadlock scenario where they can’t agree and their dispute is putting the company in jeopardy. Other times, Mr. Komninos continues, one partner may breach his responsibilities by competing against the business, and is now stealing resources or clients to launch a new endeavor. In either scenario, there are a couple of questions that must be decided upon:
- Does the business dissolve or do we continue?
- Will this be decided cordially or will it require litigation?
In either instance, all parties can usually agree that they don’t want to lose extravagant amounts of money in the process, which is what can happen if the business owners spend too much time arguing or attending court appearances, and less time tending to their responsibilities within the company.
How does a business lawyer help?
An attorney such as Mr. Komninos can successfully help bring an end to the disagreements in a number of ways:
- by representing one of the parties in either negotiations or formal litigation
- by assisting in a buy-out, in which once partner buys the part of the business that was once held by the other individual
- by negotiating a partnership agreement so that all parties are aware of their responsibilities within the company and the procedures for which executive situations will be made
- by protecting the business assets so that even after the situation at hand is settled, the business can continue to flourish
- by making sure that upon the death of one partner, problems regarding ownership can be avoided
How can these problems be prevented from the start?
One of the keys to creating a successful business partnership even amidst disputes, says Mr. Komninos, is to have a properly drafted shareholders agreement from the beginning of the company’s launch, which, of course, your business lawyer can assist you with. According to Mr. Komninos, it’s important that you identify all of the possible problems that may arise and map out solutions before they actually occur.
However, in a typical business scenario, if you enter a 50-50 arrangement with your business partner, then neither individual gets his own business lawyer. Instead, one partner pays for a business lawyer to represent the best interests of the business as a whole. However, if a major conflict does arise, then there are two possible outcomes, he says. The business lawyer and the clients will have to determine if one partner will be represented by this particular attorney, while the other partner will have to obtain a separate lawyer so that both people’s interests are being represented. Or the alternative, Mr. Komninos says, is that both clients agree to waive a conflict of interest. If this is achieved, then the business attorney will represent the company only and not either of the business owners.
Whether you’re just beginning a new business partnership or you’re sensing a strain in your current relationship, consult with a business lawyer in Tampa, or a city near you, who can make sure that you and your business are both well represented.
This article is for informational purposes only. You should not rely on this article as a legal opinion on any specific facts or circumstances, and you should not act upon this information without seeking professional counsel. Publication of this article and your receipt of this article does not create an attorney-client relationship.
