5 issues that can threaten your business partnership in Australia

5 issues that can threaten your business partnership in Australia

While business partnerships begin with shared optimism and goals, they quickly can become vulnerable. As a leading commercial law firm on the Gold Coast, Ballantyne Law Group covers all areas of business partnerships, including expert legal support if and when problems arise.

1. We are no longer on the same page

Before entering a business partnership, it makes sense for all parties to discuss, understand and agree to its values and vision. After all, if partners aren’t on the same page, problems can rapidly escalate.

That is not to say you can’t bring differing opinions to the table, both before and during the partnership. Reasoned and robust debate is a good thing. But if those differences become increasingly untenable, then your partnership could be in trouble.

At Ballantyne Law Group, we recommend all parties develop and implement a partnership agreement. This document contains details and directions around company vision, expansion and exit plans, short and long-term strategies, and other considerations. Once signed off by all partners, it becomes the legally documented foundation of your partnership.

2. Nothing personal; this is business

Business partnerships are often formed between mates or family and, in the beginning, such familiarity is reassuring. Risk occurs when that personal connection outweighs business priorities and practices.

At Ballantyne Law Group on the Gold Coast, our commercial lawyers understand that keeping your business and personal relationships separate may not be easy … but it is sensible.

Again, drawing up a partnership agreement is a sound business decision that provides the necessarily pragmatic details of all aspects of the partnership.

 3. If we’re all in this together, why am I doing all the work?

Uneven distribution of responsibilities can place strain on any business partnership. Of course, sometimes this is unavoidable, such as when circumstances (e.g., retirement, illness, relocation) mean a partner can no longer fulfil their obligations to the partnership.

However, in cases where a partner has really dropped the ball – personally, financially, professionally, legally – the ensuing negative impact and likelihood of conflict can be considerable.

In a partnership, all parties share legal liability, which is all the more reason for a partnership agreement to provide guidance and legality if things go awry.

4. Business plan? What business plan?

In tough times, the attention you put into setting up your partnership takes on extra meaning. That is why having a strong business plan from the start is a very wise investment.

At Ballantyne Law Group on the Gold Coast, our team of leading commercial lawyers can help you design a business plan that accounts for the myriad factors that can affect the operation of a business/partnership. These include market viability, earnings projections, payroll and cashflow, tax liability, access to financing, provision of an exit strategy, shareholder agreements and more.

5. The best laid plans …

Nothing undermines a partnership faster than lack or loss of trust, which is why it is essential to have a good exit strategy.

Not only does an exit strategy provide clarity around the impact of events such as retirement/semi-retirement, takeover or financial issues, it also offers protection in more unconventional circumstances – e.g., if a partner has acted unethically or illegally, meaning all members of the partnership are compromised.

For all your commercial law needs, make an appointment, come in and talk to our Gold Coast Commercial Lawyers at Ballantyne Law Group.

News

Related Posts

img
  • 18/10/2021
When, why and how lawyers work with accountants
Read more
img
  • 03/07/2021
Should I restructure my business?
Read more
img
  • 21/06/2021
3 Frequently Asked Questions On Taking Ownership Of A Business
Read more
Google Rating
5.0
Based on 65 reviews