Starting a California business with a partner is exciting. However, if you and a partner run into disputes, you will want to find ways to resolve them.
One way to resolve a business partnership dispute is to have a buy-out. This means that one partner buys out the other so that the business can continue. If there is an agreement in place beforehand, this route is a good one to take to end a dispute. However, if there isn’t an existing agreement, it’s necessary to perform a valuation of the company to determine how much it might cost to have a buy-out.
If you want to try to resolve things in a better way that might result in both or all partners remaining with the business, business mediation is probably your best option. A mediator is a neutral third party who listens to everyone’s sides while offering helpful advice on how to proceed and settle the dispute. Mediation often works well due to all parties getting the opportunity to be heard.
A freeze-out merger occurs when the majority owners of a business don’t have equal interests. If a major business dispute arises between partners, the majority owner or owners can create a new company through a freeze-out merger. This forces the disputing partner out of the business while paying them.
When going this route to resolve a business dispute, it’s important to get help from a professional who has the knowledge and experience necessary to provide the right guidance.
Arbitration is not exactly the same as mediation, but it also involves a neutral party to help settle business disputes. Both parties must agree to this method, which allows a settlement to be reached out of court. However, if arbitration isn’t successful, you can then go to court.
If you have a business dispute with your business partner, finding the best option for resolving things is important.