A business partnership is similar to a marriage or other personal relationship. There are times when you don’t see eye to eye. There are things your partner does that upset or annoy you. Sometimes there is a betrayal or breach of trust. Things may get so bad that you wonder if it is worth it to continue the relationship.
If that’s the case, you have to make the decision whether the partnership is worth preserving or you would be better off without your partner. In most cases, you should at least try to work things out with your business partner before taking any more drastic measures. However, in an extreme situation, such as when your partner’s behavior threatens the existence of the company, you may be better off cutting ties. Here is some guidance on both courses of action.
Tips for Conflict Resolution
Your dispute with a partner may prove irreconcilable, but you should still make an effort to resolve it if possible. As you approach the problem, try not to rush to judgment. Your partner may have a good reason for the behavior that you find problematic. Try to see the issue from his or her point of view and ask for clarification.
It may be helpful to go involve a third party who can listen without judgment and try to encourage you and your partner to see one another’s point of view. This can be informal, involving a colleague or friend as a third party. Another option is to go through a more formal process of mediation or another form of alternative dispute resolution. In this more formal process, you hire someone to act as a mediator or an arbitrator.
You can set up an active listening session between you and your partner in which each of you has an opportunity to explain your side of the dispute for approximately three to five minutes. As each takes a turn, the other must listen without comment. This can help each side to feel heard and ease any ongoing tensions.
Ways To Remove a Partner
Sometimes, however, these methods do not succeed in resolving the conflict. At this point, it becomes reasonable to think about dissolving the partnership. The partnership agreement that you drafted at the beginning of your business venture may outline procedures for how this can occur. Otherwise, it may be possible to remove a partner by buying out his or her shares in the business. This only works if you own more shares than your partner does or if you have other partners and can persuade them to cooperate to buy out the other partner.