When 50/50 Equality Turns into Stalemate

Nina L. Kaufman, Esq.

Nina L. Kaufman, Esq.

Nina L. Kaufman, Esq., owner of Ask The Business Lawyer, is an award-winning business attorney, speaker, and Entrepreneur Magazine online contributor. She saves consulting and professional services companies time, money, and aggravation by serving as their outsourced legal counsel.

Posted on November 11, 2017 in Business Partners, Disputes

I heard a sad story this week — a Tale of Two Business Partners.  One made clothing designs; the other supplied the money.  One was optimistic about the new awards she had won and where the business was going; the other wasn’t.  One wanted to continue to move forward; the other wanted to wait and see what emerged from the efforts they had already put in.

What happens next? It’s called stalemate, and especially where you have no written partnership agreement, the business is effectively . . . out of business.  Not much you can do when the business owners can’t agree on on the fundamental direction of the company.  Their options are:

  • Find some sort of mediator, coach, objective third-party to help broker a way for the partners to work together
  • Have one or the other partner buy the other out
  • Dissolve the business

Not very attractive options, and (2) and (3) could prove to be very costly.

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