Ensuring a business continues to operate when owners are fighting

On Behalf of | Sep 8, 2022 | Business Law

Starting a business with a family member, eager investor or longtime partner can seem like a great idea. However, should a dispute arise, the conflict between you and the other owner can be highly disruptive to your business.

To shield your company from the confusion and chaos that conflicts can trigger, consider certain measures.

Proactive measures

Perhaps the most practical approach to shielding a business from these conflicts is addressing them before they arise. You can use several legal tools to proactively protect your company from disputes between owners. These can include:

  • Having a written agreement in place that specifies partner responsibilities and dispute resolution methods
  • Creating a buy sell agreement that lays out rules for the voluntary or involuntary departure of one of the owners
  • Holding regular meetings to discuss issues before they become contentious

When you have these tools and procedures in place, it can be easier to head off conflicts and keep disputes among leadership from becoming disruptive or unmanageable for the rest of the company.

Reactive measures

If conflict is already occurring and it is starting to affect operations or morale, you as owners need to take action to minimize damage.

Perhaps most important is to consult an attorney. Legal guidance can help parties examine the issues, identify the legal implications and pursue appropriate remedies. For instance, your attorney can:

  • Provide counseling
  • Negotiate resolutions
  • Pursue legal claims

You might also hire a mediator to reach solutions together. Trained mediators can help business partners identify common goals, consider creative solutions and move forward respectfully and cooperatively.

Finally, you may want to meet with your Human Resources department and other leaders to discuss the message you wish to convey to your employees, customers and others. Deciding what information to pass on and how to demonstrate appropriate confidence can be incredibly complicated; presenting clear and consistent messages is crucial. 

Keeping your business running

Using both proactive and reactive measures to shield your business from operational, financial and reputational fallout in the wake of disputes can be crucial.

Not only can they help you resolve the conflict among owners, but they can also preserve the integrity of your business and the morale among your employees and customers.

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