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Facing the breakup of your partnership

While statistics show that the odds are against business partnerships, you certainly hope yours can be among the 30 percent that are successful. Partnerships offer many advantages, including a division of cost and debt, a wider scope of ideas and creativity, and a mutual support system when the business hits hard times.

Experts often compare partnerships to marriages, and you may know that a clash between you and your partners may be just as common as a tiff between you and your spouse. Still, just as marriages find ways to surge through these disagreements, you and your partners may have similar skills for resolving your conflicts. Unfortunately, this may not be the case 100 percent of the time.

Reasons why partnerships break

If the relationship between you and your partner is breaking down, you may have concerns about the future of your California business. In some cases, you may be able to engage in dispute resolution with a mediator to help your partnership regain its footing, but some situations may spell the demise of the business relationship, for example:

  • Your partner is also your spouse, and the marriage is breaking down.
  • You partnered with a close friend, and now you realize the friend does not complement your business style or company goals.
  • Your partner is not as committed to the work of the company or has personal distractions that prevent him or her from contributing equally to the business.
  • Your partner is not able to make essential financial contributions, which is causing resentment to build between you or among other partners.
  • Your relationship with your partner is strained because the business is experiencing a period of financial struggle or slow growth.
  • You and your partner no longer share the same vision for the company, or your partner was never really on board with your goals and objectives.

You may also come to realize that you and your partner have such different personalities that it is impossible to find common ground when disagreements arise. This may include minor issues, but it may also lead to serious problems, such as dealing with employees and clients, deciding the level of risk the company should take, and whether to change the direction of the company altogether.

One serious issue that often arises between partners is a breakdown of trust. If you suspect your partner of unethical or illegal practices, you and your business may be at risk. While careful vetting of potential partners may head off such trouble, you may be in a situation now where you are unsure of the best course of action. Seeking legal advice about your circumstances may be a wise move.

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