Business-Minded Legal Solutions

Is it time to amend your partnership agreement?

Starting a business with a new partner can be an exciting time. After a while, however, the relationship can get complicated.

Some conflicts between partners are simply part of working with other humans. Some disagreements can even be good for the business, because you are forced to think about things from a different perspective. However, disagreements can hinder your progress.

The following are possible signs a problematic partnership is getting in the way of doing business.

You’ve started to disagree on fundamental issues

It is normal in the course of a partnership to have some disagreements. That may even be part of the reason you decided to become partners in the first place. When the conflicts start to interfere with daily operations, however, it might be time to consider a new arrangement.

Sometimes businesses grow or change in ways that you do not expect. Sometimes your experience changes how you thought you would handle business decisions.

Being business partners means having a certain level of trust and respect for each other’s decisions. When it starts to become difficult to trust or predict what your partner will do, it can make otherwise-simple operations impossible.

Your partner isn’t pulling their own weight

There may be any number of reason that the work begins to feel uneven. Sometimes it is because the business has changed. Other times, it is because there is an issue in your partner’s personal life that interfered with his or her ability to keep up with the normal workload.

If there has been a change in in the business that is making things more difficult for the partnership to manage, it might be time to reconsider how you have organized your staff, promote someone who has proven to be a loyal asset, or hire on more workers. If your partner truly hasn’t been pulling their own weight, though, something needs to be done.

You can’t do the work of two people forever. You and your partner need to have an honest discussion about the workload, and who will handle what as you move forward.

This does not necessarily mean that you must dissolve the partnership. It is possible to amend your partnership agreement to reflect things such as a change in responsibilities, a change in ownership, modified governance or changes in distributions of cash flows.  Have your business attorney draft the amendment to ensure it is legal and enforceable.