by Madeline Laughs
RULE #73: What happens when you find out that your new business partner is negotiating without you and pretending to the New Business that you don’t exist? Never ever doubt the power of money to sway an unscrupulous business partner to do the unthinkable, especially if they are broke and desperate for income.
If you have even a small suspicion that your business partner would double dip behind your back, you should really do some investigating. If your business partner’s friends and former associates warn you that something like this might happen then you should definitely take measures to protect yourself.
A great way to test your business partner’s loyalty to you is by asking one of your friends in the business, someone your colleague doesn’t know, to approach him with New Business. Have them call with an offer he can’t refuse and then you wait.
Yes, I know this doesn’t sound so upstanding, but wouldn’t you rather know what he’s up to, than not know and eventually get screwed?
Give your business partner a few days to let you in on the offer and to give you the details. Drop hints that will open the door for conversation so he can say, “oh by the way…” If he doesn’t share the new offer with you, but continues to pursue your friend with interest then it’s highly likely your partner is on the sly with many other jobs besides this bogus one.
Call your attorney’s office and legally sever your ties with this partner immediately.
There is no way you’re ever going to fix this.
What happens after your business is dissolved can also affect how you do business in this arena in the future. If your business partner was anything like what was described in the previous paragraphs then you may have a hard road to travel ahead of you.
Here are some things you can do to ensure you stay on the high road and some ideas of how to get around any fallout your old business partner may cause after he explodes.
1. Consult an attorney.
2. Take the time to dissolve and cancel any licenses related to the business if your goal is to completely shut down. If you’re going to continue, have the old partner’s name removed from everything. Did you know that you can dissolve a general partnership on your own? You sure can!
3. Make formal announcements via Internet, email, telephone and in writing to anyone previously associated with both of you that your partnership has been dissolved and that you are continuing on your own, or with someone else.
4. Make sure to copy your old business partner on all correspondences. Send all legal documents and dissolution papers via certified mail and keep copied proof in your records. If your business partner persists in refusing to sign for certified mail and it is returned to you, put this returned document in your file too. According to the law this fulfills your fiduciary responsibility.
Expect some resistance if the feeling to part ways is not mutual. Expect the rumor mill to go into overdrive, especially if you have friends in common.
One very important note: if you have determined that along with being a bad business partner that there is also evidence of mental instability make sure to document everything. Have a private investigator check out suspect emails and phone calls. Give your old business partner the opportunity to seek professional help and make him aware of the laws he’s breaking, but don’t be surprised if he turns the tables on you.
My experience was a bad severance.
I pointed out to my former business partner that having his friends call me to ask questions, be obnoxious, spy on me and then report back to him, once I began proceedings to completely dissolve the partnership, could be seen as stalking and harassment. This only fueled his anger. I should have said nothing at all to him. He started sending me long, drawn out emails regurgitating legal jargon about how he was going to sue me if I didn’t turn over the website and all of the leads and work I had done on my own and that I had already paid for with my own money. When that failed he had one of his friends send me a fake email, pretending to be an attorney, asking me to release materials and access to accounts, even though I had paid for everything, to him for free.
Resorting to bullying tactics and threats had probably worked for someone like him in the past. If you’ve done everything by the book, then don’t fall for it.
If your former business partner continues attempting to engage you, long after the business has dissolved and all obligations have been fulfilled on your end, you can always block his emails from your account and stop taking his calls.
Prepare yourself mentally and stay strong. Take the high road under any and all circumstances. The best reward you can give yourself is the experience of surviving a bad business venture and the knowledge of what to avoid in the future.
- Business Partners are not Therapists (spreadinformation.wordpress.com)
- Get Emotional Over Litigation at Your Peril (briancorkhumancapital.com)
- Sex and the Business Deal (spreadinformation.wordpress.com)
- Exit Strategies for Business Partners (thinkup.waldenu.edu)
- Why we need to give our colleagues and clients a lifeboat (onourbikes.com)
- What Would Your Customers or Members Say About You? (blogs.constantcontact.com)
- When and How to Incorporate (turbotax.intuit.com)
- Small Business Colleagues (electrodocva.wordpress.com)