How to Plan for These 5 Deadly D’s of Business Partnerships

Your partnership may be going along smoothly without a worry in sight. However, it’s important that you and your partner talk about what you would do in the case of certain events. Some of the subjects can be difficult to talk about, but it is better that you are prepared for whatever may happen.

Disinterest

No matter how excited you are for your business, you can’t always know how excited your partner is going to be during the long run. There needs to an exit clause within your partnership agreement that allows your partner to leave if they are more interested in other career opportunities. You will need to put in place that your partner will not be financially compensated if they leave due to disinterest.

Divorce

When your partner goes through a divorce, it is going to be difficult to deal with their ex. Since California is a community property state, they will most likely have a stake in your business due to their marriage with their partner. It is important to get a lawyer involved in order to deal with an ex-spouse who wants to take as much as they can get their hands on during a divorce. Even when an ex is just trying to stick it to the one they are divorcing, it is easy for you to get caught in the crossfire.

Source: https://www.mentalhealthamerica.net/separation-and-divorce

Drug Addiction

One thing that will keep any business from flourishing is someone who is addicted to drugs. What often begins as an innocuous use of prescription pain management solution can easily spiral out of control. As conventional substances cease to provide the relief they once did, users begin seeking stronger substances such as fentanyl or heroin. This doesn’t make someone bad, it just means that they need help. It is important to confront your partner when you feel as though they might be sliding down a slippery slope. If they are not willing to get the treatment they need, you may need to push them out of the partnership. There are legal ways that you can do this with the help of an attorney.

Source: https://www.therecoveryvillage.com/fentanyl-addiction/treatment-rehab/

Default

When your partner has financial issues of their own, it could begin to affect you as well. If they are so far behind on their payments that they are defaulting, their creditors could come after your business. This is why it is important to have your business protected by articles of organization. A limited liability partnership will disallow creditors from levying your business income or targeting your business assets. 

Death

The last thing that you will want to talk about with your partner is the potential of death. However, there are times when untimely deaths happen in a partnership. It is crucial to sit down with your partner and an attorney to go over what is going to happen in the event that one partner dies. They need to put in their will what will happen to their stake in the business.

Source: https://justwillsandlegalservices.co.uk/latest-news/happens-business-partner-dies/

While having a partnership comes with certain obstacles, there are still great advantages to starting a business with someone you trust and love working with. Before long, you can have all of the legalities in place that will help you have a partnership in a safe and easy way.

If you need help in establishing a partnership or starting a business, let Lum Law Group help!