When you start a business, you and your partner may not plan for future conflicts. However, disagreements between business partners can cause significant disruption to a company. You may want to consider ways to solve problems before they arise.
Business News Daily says that you could write a business partnership agreement when you first start your company. Over the course of a partnership, CEOs may encounter their fair share of problems. While some may be minor, others could threaten your ability to run the company. Writing a solid partnership agreement can provide guidance when you experience conflict.
Guidelines for ownership
One of the benefits of a partnership agreement is that it allows you both to understand who owns the company. You and your partner may consider yourselves to be equal managers. However, you may not always own equal shares of the business. The person who came up with the idea, for example, could own a larger share. Conversely, the one who contributed the most financial resources to start the company could own more of the business.
This factor is important because it guides how much decision-making power you each have. If your partner owns more of the company, he or she may have the final say when it comes to making choices about the future. Your partnership agreement should clearly lay out the percentage of the company that you each own. Additionally, you should write down who gets the final say in certain matters.
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Guidelines for conflict
The Houston Chronicle says that a good partnership agreement should also explain how you will solve problems. You could include guidelines for negotiation, for example. If this tactic does not solve a problem, you could write out what other options to pursue, such as mediation. Having these steps laid out can help ensure that you and your partner know what to do when problems arise.
Although you may not like to consider future conflicts, having a plan can help you navigate these situations more peacefully.