I have fallen out with my business partner what should I do?
Sometimes, perhaps through nobody’s fault, business relationships reach a natural conclusion. When this happens, it is important that all parties continue to communicate effectively to ensure that the value they have created in the business is not lost.
Engaging in sensible discussions at an early stage will allow both parties to go their separate ways, whilst retaining as much value as possible in their respective businesses. Early resolution, perhaps through mediation or without prejudice discussions, can allow the business to be carefully and fairly divided up, or for one party to exit the business with an appropriate amount of compensation.
In these circumstances mediation is a particularly effective tool, allowing all parties to resolve their issues and go their separate ways without destroying the value in the business.
How do I proceed if one of my directors is running a secret company?
Directors of companies have specific duties to the company (known as fiduciary duties), which oblige them to act in the best interests of the company, even if those interests conflict with their own personal interests.
Sometimes directors try to syphon parts of the business off into their own companies, so that they can retain the profit for themselves. If you become aware of a director doing this it is important to challenge the behaviour as soon as possible to avoid any suggestion that you have accepted it by conduct. Recovering loss for the company is more difficult than preventing it occurring in the first place. If you become aware of any activity like this, it is important to seek legal advice as soon as possible so that you can assess your options.
Generally speaking, there are far more options open to you at an early stage of a dispute than later on, when positions have become entrenched, or serious damage has already been done to the business.
I think my business partner is using the partnership accounts wrongly, what should I do?
What each partner is entitled to do in a partnership is defined by the partnership agreement, or the conduct of the parties established over a period of time, or a combination of both.
If you have discovered that your partner is in breach of their duties under your agreement you need to act swiftly to ensure that irrecoverable damage is not caused to the business.
If, for instance, a partner is taking money from the partnership account for their own ends, as well as depriving you of the potential benefit of that money, your partner may also be failing to pay debts to your suppliers, which in turn could leave you personally liable for the debts of the business.
In these circumstances it is important to get advice quickly on your options, hopefully before any serious damage is done to the business.