Monday, August 17, 2009

Partnership Agreements Make A Difference

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I have working on several partnership dissolutions this year. Perhaps it is a sign of the times.

Once again, the amount of anger, pain, time and money spent on these dissolutions is in direct proportion to the involvement of attorneys in the beginning of these businesses.

When an attorney is deeply involved in the formation of a business entitys, such as a partnership, corporation or limited liability company, then the dissolution is relatively fast and inexpensive. The owners have the procedures in place to buy out an owner who is leaving or isn't performing.

On the other hand, when an attorney is not involved, the dissolution can turn ugly and end a lawsuit. This can result in legal fees of tens of thousands of dollars.

The real difference isn't the documents and agreements that I or an other attorney provides. The difference is that the owners are directed to think of issues and problems that they will otherwise over look. Things such as: what happens if one person stops working the business, what happens if we want to bring in someone else, who will be performing what role in the business, etc.

Addressing those issues also means that the business is more likely to be successful.