An internal or external business dispute can wreak havoc on individuals and companies alike. Fortunately, you have several legal options for coping with a dispute in the manner best suited to your particular challenge.
- Buyout – One partner in a business can buy out another’s ownership in a business when differences appear irreconcilable. As is the case with so many business decisions, the best time to deal with this contingency is before the need arises. Every business partnership should have their attorneys create a formal buy-sell agreement that covers the entire process in detail. HG Legal Sources notes that when one partner offers to buy the other partner out, the second partner may have the option to reverse the request and but the first partner out instead, a situation known as “I cut, you choose.”
- Sale – Selling the business may allow everyone involved to exit the business and see some profit at the same time. On the other hand, this process can generate plenty of fresh new disputes over how the proftis from such a sale should be divided. Selling a business can be a lengthy, challenging process. Think carefully about how long you want the resolution of your business to take; you may find that a less remunerative but faster process is more to everyone’s liking.
- Dissolution – Dissolving a business is a relatively fast and clean form of dispute resolution. As described by the U.S. Small Business Administration, the process generally takes just 90 days and involves the submission of a one-page form to the state. While the dissolving partners will need to make vendors, contractors, and partnering businesses aware of the dissolution, they are not held accountable for each other’s debts or liabilities in regard to the business.
Going to Court
If your dispute cannot be resolved through amicable means, it’s time to go to court. Legal battles require considerable legal expertise and experience. Lawyers.com points out, for instance, that he lawsuit must be brought in the appropriate court, for instance. The complainant must also ask for a specific judgment from the court, whether it involves a financial reward or an order to cease and desist from the offending behavior.
- Settlements – If the parties in the dispute would prefer to cut their courtroom expenses short or avoid going to judgment, a settlement behind closed doors can put an end to the court proceedings. The party bringing the lawsuit will agree to let the other party pay less damages, while the other party may concede to some, but not all, of the business changes originally requested.
- Judgments – If either you or the other party in the dispute refuse to settle out of court, there is no other option but to take the case all the way to judgment. In this scenario, you’ll need all the legal expertise at your disposal to make your case while weakening the opposition’s case. The judge will then pronounce a verdict or guilty or not guilty and award damages.
All of these options will likely call for legal assistance at some point or other. You can get your partnership off to a strong start by seeking this assistance as early as possible, especially in the structuring of the business and the creation of agreements that enable smoother operation and better communications. Contact Coulter Law Group to learn more.