Every year the number of corporate disputes increases by about 20%. When partners are in conflict, business suffers. Often it happens because when people create a joint business they agree by word of mouth.
How to minimize: Secure the relationship legally – on paper. In the contract, define the decision-making procedure, the company’s funding obligations, the rules of profit distribution, as well as the rights and restrictions on the disposal of their shares. For example, you can specify that the minority participant of the joint LLC with a share of 20% will receive 80% of dividends. And establish the circumstances, in the emergence of which the person is obliged to sell his share of the company or, on the contrary, to buy it back from the partner. And in order not to bring conflicts to court, provide for a procedure for amicable resolution of disputes.