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And on that happy hope we're gonna switch gears and talk about.
Divorce that's right well at least in a business sense anyways on Iran also is -- she's a partner with the -- -- -- McLaughlin law firm in.
Thanks so much for joining us we were just talking with -- about small business owners.
In some of the they hurdles that they're facing -- hiring in at some of the problems are facing in issues in the political campaign.
But taking it down to the micro level when you are this business -- of so many people.
Can't really get a business going without a partner they need some cash or if they pull their money together they can maybe we have pulled together bigger business but.
Just like you know in marriage it doesn't always work out so doesn't always work at a special and a bad economy that's really when business -- start to have an -- the -- -- exacerbates things and a lot of you know divorce rates have spiked over the past couple of years because there's so much extra stress and pressure on every line in.
And talk to us a little bit -- Steps you can take once you realize it's not working out to it to make it.
As easy as possible to to break up to dissolve this and obviously partnerships can be structured different ways but.
There -- -- a couple of -- three steps that most business owners could apply to their own business.
When we always counselor clients when you realize that -- having problems that's the time to go and seek legal advice right away don't let the problems fester.
Because when the problems begin to faster.
That's when -- headed towards litigation.
Rather than having the opportunity to work out your problems before you go to court and I'm imagining litigation will be more expensive -- some of the other -- you can work it out I was -- my clients to avoid litigation at all costs even though that's how lawyers make money.
That's how business owners lose money.
-- so many downsides to litigation that can be avoided if people go to mediation to -- business disputes.
Litigation requires that business owners give up control of their business basically to the court.
Not just to the court for scheduling purposes -- for financial purposes -- Because once the court has the case the judge has the case he's not gonna let this business owners make financial decisions without approving them.
So basically there is going to be an extra level a decision making in the in the business before -- the business can keep moving forward.
-- meanwhile business it's already suffering could theoretically go -- there are certainly flounder.
Why you're in this sort of you know gray area with that that's -- And what you're doing by going into litigation is -- also taking -- a new business partner.
And that business partners her lawyer.
Because you're a lawyer is gonna get paid in your partners lawyers gonna get paid before you get paid out of that business so basically you're lessening your profits even more by bringing in attorneys to litigate your differences.
What do you need to know when you're going into business with a partner it would -- -- -- skin for a -- you sit down you talk about things you know maybe you can lifelong friends may -- just met over a cup of coffee.
For a -- and you were talking about ideas and your hat or you're like minded but it.
What you need to related outline.
Is there like a pre nup for business.
NASA we always recommend have -- agreement in writing so many times typical into business with a great idea or with family members with a friend with a great concept.
But you need to work out the mechanics of how that business is going to be run.
Who's gonna pay the rent who's gonna be responsible for the majority of the work is gonna make hiring decisions.
And you also need to work out as in a pre nup what happens if you can't get along -- you can't agree on a point of view.
Are you gonna bring in an independent needed to try to work out your differences which is what we always recommend.
And haven't dissolution plan in place because whenever profits you -- may have accumulated if you spend those profits.
Litigating the end of the business you're both gonna end up with nothing.
So a well written contract for business owners can avoid a lot of those issues even if you have differences and disputes.
Now other certain -- you should look out for it when you're going into it in particular when your -- arranging this and setting up the structure of who's gonna be will is liable -- mean you need obviously you would like to share that I think ideally out you may not have have equal equity stakes and how would that break other -- you need to have the.
Now for well that's you have to value what each partner brings to the business some.
Pardon me -- bring the money to the business that they may bring.
The employees or the where with -- to run the business and -- need to put a value on what's what each partner brings to the business.
-- -- you always have to be careful of is what if one partner wants out.
Are you gonna end up with.
A business that you can't buy from the -- part -- so we always recommend valuing.
What the other partners share of the businesses where it's an eight you have the right to -- -- partner -- -- -- they wake up and say you know what I don't wanna do this anymore.
Yes I think you have to be careful of is what -- your partners goes through divorce or god -- dice.
Who're you gonna be business -- yes if their share of the business goes to their spouse.
Or goes to their kids to inheritance are you now running a business with people that you didn't anticipate being in business when it.
So the agreement also needs to deal with that issue and what's gonna happen if they diet where they get divorced.
I was gonna ask her what happens if you have an inherit a business that you really don't wanna be apart up.
Right well yeah.
It is -- business's value structured correctly if the business is valued properly and an agreement you can say look you know I inherited this this is but I want to have anything to do with it so you can buy me out of it.
For the amount set forth in the agreement.
Often times it's hard to when starting a business come up with a value for that this is because -- don't know how so successful it's going to be.
But what you can do we shouldn't come up with a methodology to value the business within the value of these upon sales -- -- value based upon assets.
Things of that nature so that even if you don't know what the value is you can agree on the method of arriving at the value which is often times of people fight about even more than the value -- well it's.
Like in appraisal on your home -- in every year every six -- come out it could be something different.
And you would need to do that I would imagine periodically every several years or something to have that as a basis for these particular reasons I would imagine.
You need to look at that agreement over and over it it's it become stale after a while because your business changes and grows and the agreement doesn't grow with you.
No matter how well drafted it is I was recently involved in the case were partners couldn't agree on what kind of pickles they should import.
And they spent hundreds of thousands of dollars fighting about this issue so this is not -- mean that they anticipated when they started the business.
But clearly agreeing on a kind of products have been selling the -- -- -- -- -- some in the causes significant problem for them.
It sounds like a lot of details in basically year your nutshell advice to -- -- to consult an attorney ahead of time as you're structuring this and every demand for the pre nup I would imagine.
That's correct to save a lot of money people sometimes balk at that expense initially that you save yourself a lot of money in the long term.
So on a process is a partnership PC unit -- -- law firm I believe we have here we have the website right there for you.
To check it out for more information.
To avoid the divorce or at least be set up.
Ahead a time of -- a lot of for joining us here and quickly.
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