This piece first appeared on July 19, 2010
Dear Aunty B
My husband and I are currently in a partnership with my brother-in-law. It has gone sour and my husband and his brother have not spoken in four years and only communicate through their mother.
The brother-in-law works the business and we are like “silent partners” that do the paperwork. Since the brother-in-law has run the business into the ground and will not make any effort to assist in selling the business we feel somewhat stuck and are unable to get out of the partnership.
How can you get out of a partnership, when the partner is hell-bent on financially destroying you? Can a partnership be dissolved when one party is not willing to do anything to improve the situation? On what terms can a partner “pull out”?
Regards,
Fleur
Dear Fleur,
Very tricky and at risk of the Family Business Association wringing my neck, this is the perfect example of why – sometimes – it is best to avoid going into business with family members.
You need to put all bitterness aside and see this for what it is: it is a business relationship. Pure and simple. I take it you do not have a shareholder’s agreement, which of course stipulates what happens in situations like this. If you can’t pull one out of a drawer, go and see your lawyer.
Forget terms like “dissolve” and “pull out”. There is a raft of laws that prevent business partners not being properly compensated when the relationship blows up.
As partners in a business you have a range of duties to act in good faith and in the best interests of the company. And so does your brother-in-law.
What you need to do now is make sure there is a negotiated and organised separation of the business interests.
That is your aim. Use your lawyers and keep your emotion and your poor mother-in-law out of it.
Good luck!
Your Aunty B
I’m SmartCompany’s resident Agony Aunt. Have a problem to solve? Just ask. @IamAuntyB #AuntyB
