Business Partnerships: One Call to Foster Success
By: Attorney James A. Spella, Schloemer Law Firm, S.C.
My practice experience has been in estate planning, real estate and business transactions – including contracts and succession planning.
I am not a litigator. Other attorneys in our office will aggressively, professionally, and competently represent our clients in those matters in which litigation is necessary to assert claims or defend against claims being asserted. Unfortunately, our public environment, has become too many times a ‘name calling’, ‘in your face’, and ‘I’m right no matter what’ environment. Civil discourse and reasonable accommodation have been diminished. Litigation will follow, and we will represent our clients.
That said, I have been blessed to practice in the areas where planning for the ‘what ifs’ and ‘meeting objectives’ are the motivating factors.
Our business attorneys are ‘solution’ orientated to enhance the success of our client and the business.
For example, when assisting an individual who is creating a business partnership, we stress, that just like marriage, our client should discuss important matters before saying ‘I do’.
- How are we going to make decisions?
- How much will we each contribute?
- How will we value our business?
- What are the triggering events that could affect our co-equal relationship?
- I quit?
- I want out.
- My spouse’s death with his/her marital ownership in the business?
- Will I be required to purchase your interest? Or have an option to purchase, and if not exercised we liquidate?
- If there is a purchase, what are the payment terms? Collateral? Personal Guarantees?
Planning at the onset has the following benefits:
- Most importantly, these relationships and contractual understandings need to be made – if made ahead of time in a contractual document, the unknown results, possible acrimony, and business injury will be minimized.
- When these relationships and contractual provisions are agreed to at the onset, then ‘what’s good for the goose, is good for the gander’. Each person is required to see themselves as either the seller or buyer, and what is fair and agreeable.
- It is our experience, that when business partners do not address these issues at the onset – they never do – leaving the business, spouses, family members at risk as to what will happen. We will suggest to you that the spouse of a deceased partner has a significantly different viewpoint than the surviving partner. The partners have done them an immense disservice.
- If the partners cannot agree on these fundamental relationships/contractual provisions at the onset, this suggests that this is a partnership that should not continue. Best to terminate the possible business co-ownership at the onset, then hope that these matters will be addressed.
So, when embarking on a new business opportunity, besides contacting your accountant, your insurance professional and your banker, you should call Schloemer Law Firm.
This is the call that will protect your business interest in a fair and understandable way, and allow you to devote your efforts to success, instead of looking over your shoulder.
If you have any questions about this article, please contact the attorneys at Schloemer Law Firm, S.C. at 262-334-3471.
Originally published: June 3, 2020.
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Disclaimer: The information contained in this post is for general informational purposes only and is not legal advice. Due to the rapidly changing nature of law, Schloemer Law Firm makes no warranty or guarantee concerning the accuracy or completeness of this content. You should consult with an attorney to review the current status of the law and how it applies to your unique circumstances before deciding to take—or refrain from taking—any action. If you need legal guidance, please contact us at 262-334-3471 or [email protected]