Like any relationship, your relationship with your business partner is going to have its ups and downs. You will not always agree. You may argue. While you may have felt full of optimism and enthusiasm when you started the company, that feeling will not last forever. Things could take a turn.
If they go very badly, you could find yourself in a serious dispute with your business partner. This puts the entire company in jeopardy. You need to know your rights and what steps to take. Ideally, you and your business partner signed a legal partnership agreement when you started the company, which helps to detail what rights you have, what steps to take if there is a dispute and what to do if you can no longer work together.
Why do these disputes happen? A few reasons include:
1. You think your partner is stealing company funds
It could be a blatant case of embezzlement, where your partner takes money from the business. It's shocking to find out that it's happening with someone you knew and trusted, but it does happen. It could also just be that your partner is using funds in non-approved ways. This could include issues like paying for personal expenses with a company card.
2. You think you do all of the work
The level of effort each of you puts into the job does matter. Even if you do very different things -- you handle the behind-the-scenes logistics, for instance, while your partner makes sales -- you need to know that you both are working hard and that the workload is equal. If you think your partner is neglecting the company and making you do all of the work, that's a problem.
3. Your partner makes decisions without you
This can become a bit of a gray area. There are some situations where one person may make decisions without consulting the other. However, it can cause a dispute if you think that your partner is making major decisions that impact the future of the company without asking you.
4. You have different visions
When you both think that the company should seek different goals, that can make it impossible to work together. You each have a different vision for what the company should be. You may feel that what your partner does directly undermines what you do. You may just feel like this is not the company you wanted to create when you launched it together.
Resolving a dispute
When disputes become serious, it is crucial to know what rights you have as an owner, what steps you can take to resolve the situation and what to do if a resolution feels impossible.