I’m a big fan of partnership agreements done right. But I have no support for the game’s partners sometimes play against each other.
So how do we avoid the gaming?
Let’s start with real-life examples. We have a partnership agreement that includes a buy-sell provision in cases of disagreement. But what if there is no disagreement but one partner wants to force a buyout? Or what if one partner wants to force a sale to a third party based on a right-of-first-refusal provision? I love games in business – see my Games of Planning speech http://www.yourbusinessspeaker.com/presentations/
but not these kinds of games.
The best defense is a well-written, thought-out partnership agreement.
Of course, it’s impossible to anticipate every possible scenario. But we can look at history and see many of the games. We know partners come and go. We know there may be a need for a buyout. We want to make sure the buyout provisions and evaluation formulas work in many scenarios so that regardless of the details we end up with a positive outcome.
The best strategy is to play what-if games. Run through scenarios. What happens if A happens? If B happens? Position yourself for the possibilities in your business’s future.
What is your experience? Has a partner gamed you? What have you built to protect yourself? Join us in the comments below.
This posting is intended to be a tool to familiarize readers with some of the issues discussed herein. This is not meant to be a comprehensive discussion and additional details should be discussed with your attorneys, accountants, consultants, bankers and other business planners who can provide advice for your circumstances. This article should not be treated as legal advice to any person or entity. Freeimages.com/Photographer John Siebert.
About the Author
Shawn McBride — R. Shawn McBride is the Managing Member of The R. Shawn McBride Law Firm, PLLC. Shawn works successful, private business owners in their growth and missions to make a company that stands the test of time. You can email R. Shawn McBride or call (214) 418-0258.
Check us out on the web.
Add us on Twitter: @rsmlawpllc
Like us on Facebook.
Make sure you download our free reports on how to build your company the right way.
Posted In: Business ManagementAbout the AuthorR. Shawn McBride — is the Managing Member of The R. Shawn McBride Law Firm, PLLC. Shawn works successful, private business owners in their growth and missions to make a company that stands the test of time. You can email R. Shawn McBride Law Firm or call (214) 418-0258.