The success of business entities depends on interpersonal relationships. Relationships can be harmonious and productive at times, and, other times, they can be fraught with conflict. Even when a business relationship begins with the best of intentions and a shared vision, the partners, shareholders, or members can become vulnerable to communication difficulties, financial disagreements, or tense arguments regarding the philosophy of running the enterprise. Just as in other relationships, it is critical to respond in an appropriate way and to seek out wise counsel so you can communicate effectively and resolve the dispute that is threatening the makeup of your business. In such situations, consulting with a business law lawyer in Charlottesville can provide the guidance you need to protect your interests and navigate complex legal challenges.
Common disputes that arise in business entities include those regarding the direction of the business, investment strategies, management roles, performance accountability, employee supervision, and personal compensation. The conflicts may escalate and result in serious business disputes where one member has a different vision for the company, has violated the business agreement or bylaws, breached a fiduciary duty, misappropriated company assets, just wants out, or the company is faced with dissolution.
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When irreconcilable conflict arises, the first question to ask is: “What does the agreement say?” Partnership agreements govern relations in a partnership, shareholder agreements govern matters in a corporation, and operating agreements control limited liability companies. Because these agreements detail the specific methods for handling disputes and controversy, it is essential that every business have well drafted agreements.
Such agreements should clearly address the many issues that a business will likely face, outline the owners’ rights and responsibilities, and resolve disputes when they occur. More specifically, a partnership, shareholder, or operating agreement will set out specific details including:
- what each partner’s, shareholder’s, or member’s job will be,
- structure for management,
- specify voting percentages and procedures,
- establish partners’ and members’ compensation,
- provide for procedures to resolve disputes, such as mediation or arbitration,
- specify situations and procedures for dissolution,
- provide buy/sell provisions, right of first refusal, or right to match offers where applicable,
- contain any appropriate restrictive covenants,
- detail actions to be taken if a partner or member abuses their position or breaches a duty,
- include procedures for adding and approving new partners, and
- specify exit strategies for members and for termination of the entity.
The Virginia business dissolution attorneys of MartinWren, P.C. offer decades of experience and a broad range of expertise to provide solid guidance during a highly emotional and fractious fight over the direction of a business entity. Together with MartinWren, P.C.’s tax, transactional, and litigation attorneys, you can rest assured that your concern will be fully considered and thoroughly resolved.
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The Virginia business attorneys of MartinWren, P.C. can help draft comprehensive business agreements for making decisions and resolving disputes long before any conflict occurs. We can also review your company’s existing documents to ensure all potential issues have been considered and adequately addressed. And if your company is currently experiencing disputes or dissension, the Charlottesville business dissolution attorneys can explain what steps can be taken to address and resolve these issues. Contact the Virginia business dispute attorneys at MartinWren, P.C. by calling (434)817-3100 and speak with either John B. Simpson or Robert E. Byrne, Jr.
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