Forming an Indiana partnership is often an ideal way to strengthen a business. Unfortunately, if one or more partners breach a contract, misuse funds, or fail in their fiduciary duties, it may jeopardize the company.
According to the Indiana Secretary of State, a general partnership occurs when two or more individuals become founders or partners in a for-profit business. You can take steps before problems begin that minimize the fallout if partnership disputes arise.
Sign a formal agreement
Depending on the type of business, you and your partner may sign a partnership or operating agreement. It should define each partner’s role, obligations and duties, and who has what level of control. This is also the place to spell out the business procedures for making decisions and what happens when there is conflict. Specifying ownership percentages, a process for removing a co-founder or partner and how they can withdraw can make significant management changes easier and reduce the turmoil the business may experience.
Discuss the dispute
Partners should talk about issues as they occur, rather than ignore them or hope they work themselves out. This can prevent a minor problem from becoming a dispute that requires litigation. Set aside time that allows you to focus on the issue at hand, such as an hour on the weekend or after work. Take it off-site to a location where you can relax and perhaps share a meal. This can often remove some of the tension and make it easier to problem-solve.
Business disagreements can become legal disputes when left unchecked. In some cases, you may agree that a separation serves you both best. Depending on the situation, mediation or negotiation skills may help terminate the partnership minimizing the impact on the organization.