Ending Business Decision Gridlock: Considering a Business Divorce

When a business owner works alone, the decisions, successes or mistakes are all the responsibility of one individual. He or she is the boss. When there are other partners involved, however, disagreements over business decisions are both likely to occur and difficult to manage. Whether the business operates as a corporation, a limited liability company or a partnership, arguments over important business decisions can halt the flow of work and generate tension between partners. When disputes with partners are impacting your ability to operate effectively, it may be in your best interest to contact a business lawyer in Massachusetts (if you are in the greater Boston area) to consider your options. Considering whether business divorce makes sense – that is, separating from a business partner – may prompt the partners to be able to discuss critical issues and determine next steps for the company. People can make better business decisions if they understand that they have choices and that each choice can lead to different legal outcomes.

Rearranging the operating structure of the business may solve some problems. If owners have different spheres of day-to-day responsibility, their interactions may become less stressful. Other problems cannot be solved so easily. One or more of the partners may want or need to be bought out. Depending on the company’s documentation (such as shareholder agreements or buy-sell agreements), the buyout discussions can be complex. How do you value the company? On the level of negotiating dynamics, do both the partner leaving and the partner staying have such an identification with the company that direct discussions are almost impossible? If the partners cannot agree, they are often surprised at the limited range of options that a judge has when dealing with these situations. It is rarely in anyone’s interest for the business to be put into receivership.

Even though partner problems are as common in business as they are in marriages, not all businesses end up in business divorce. A business lawyer can help you explore your situation and learn about your alternatives.