How Multi-Owner Businesses are Like Marriages
- Date: 2007-11-05 - Word Count: 425
Share This!
A person nearly always has some pretty large dreams when they form a business. If the business is one that will be owned by multiple people, it is vital that you make sure everyone has the same dream.
A marriage is a commitment between two people. Having developed a relationship over time, they are ready to say this is THE relationship they want to carry out for the rest of their lives. Unfortunately, many marriages simple do not make it. While there can be some traumatic reason for this such as a cheating spouse, the more common reason is people simply grow apart. The same can be said for a business.
A common business situation starts like this. Two friends come up with an idea they are enthusiastic about and decide to move forward. The friends put together a business plan, funding and so on. They then launch the business and commit themselves to the pursuit of that business for the foreseeable future.
As with life, the business is eventually going to run into choppy waters. The particular issues that arise can range from a lack of business and money to too much business and cash flow issues as well as many other things. The exact problem is irrelevant. What is relevant is the business reaches a point where fundamental decisions must be made above and beyond what the original plan encompassed.
At this point, the owners may have the same solution in mind. Often, they do not. When they feel differently, a divide can be created between the owners much like two people growing apart in a marriage. As time passes, the divide can heal or fester. When it continually festers, you will eventually be facing divorce.
Divorce in a business entity is much like that in a marriage. There is a totaling up of assets and income and then a division of the same. The problem, of course, is most businesses can't survive such a division. The only answer is a cash settlement of some sort that will be agreeable to the parties. Usually, nobody is happy with it.
Is there any way to avoid this situation? Not really. You can use buy-sell agreements and the like, but a split is a split. The best approach, in my opinion, is to realize that when you enter into a business with other people, you are essentially agreeing to marry them. In some cases that can be good. In others, it can be bad.
Richard A. Chapo provides California incorporation services. Contact him at SanDiegoBusinessLawFirm.com.
A marriage is a commitment between two people. Having developed a relationship over time, they are ready to say this is THE relationship they want to carry out for the rest of their lives. Unfortunately, many marriages simple do not make it. While there can be some traumatic reason for this such as a cheating spouse, the more common reason is people simply grow apart. The same can be said for a business.
A common business situation starts like this. Two friends come up with an idea they are enthusiastic about and decide to move forward. The friends put together a business plan, funding and so on. They then launch the business and commit themselves to the pursuit of that business for the foreseeable future.
As with life, the business is eventually going to run into choppy waters. The particular issues that arise can range from a lack of business and money to too much business and cash flow issues as well as many other things. The exact problem is irrelevant. What is relevant is the business reaches a point where fundamental decisions must be made above and beyond what the original plan encompassed.
At this point, the owners may have the same solution in mind. Often, they do not. When they feel differently, a divide can be created between the owners much like two people growing apart in a marriage. As time passes, the divide can heal or fester. When it continually festers, you will eventually be facing divorce.
Divorce in a business entity is much like that in a marriage. There is a totaling up of assets and income and then a division of the same. The problem, of course, is most businesses can't survive such a division. The only answer is a cash settlement of some sort that will be agreeable to the parties. Usually, nobody is happy with it.
Is there any way to avoid this situation? Not really. You can use buy-sell agreements and the like, but a split is a split. The best approach, in my opinion, is to realize that when you enter into a business with other people, you are essentially agreeing to marry them. In some cases that can be good. In others, it can be bad.
Richard A. Chapo provides California incorporation services. Contact him at SanDiegoBusinessLawFirm.com.
Related Tags: business, marriage, sales, divorce, cash, growth, conflict, split, agreement, open, start, buy-sell
Your Article Search Directory : Find in Articles
Recent articles in this category:
- Work Cover Lawyers Help Workers Favored In New Contingency Agreement
Were you ever given a small amount of compensation after having been injured on your job? Have exper - Florida Last Will And Testament Information
A person who is at least 18 years of age can complete a Florida Last Will and Testament and is refer - Florida Durable Power Of Attorney Information
A Florida durable power of attorney is a legal document that designates a person to act on behalf of - California Power Of Attorney Information
In California any adult person who has the ability to enter into an agreement can complete and sign - Criminal Lawyer
Sexual assaults are increasing with alarming frequency and everyday there are news reports about var - Fort Lauderdale Foreclosure Lawyer Explains, Foreclosure Is Not Your Only Option, You Have A Choice
Foreclosure has been one of the foremost topics within the real estate world in recent years, as eac - Should You Make A Personal Injury Claim?
Personal injury claims now gain wider exposure than ever before, yet many people are still unaware o - Mesa Bankruptcy- Regain Financial Stability
Are you drowning in overwhelming debt? Is it causing you mental, emotional and physical distress? Ta - How Bankruptcy Can Help You Financially Start Over With A Clean Slate
Fed up with debt? Desperately want to be free from the unbearable problem? If yes, then you should n - Major Yasmin Birth Control Side Effects
Yasmin is a popular form of hormonal birth control that has been heavily marketed, especially to you
Most viewed articles in this category:
- Be Aware of Single Owner LLC Tax Problems
One of the more popular business entity choices these days is the limited liability company. If - 14 Tips on How Parents Who Have a Child with a Disability Can Organize Their Estate
Copyright © 2007 L. Mark Russell As a general rule, parents should keep their original document - IF OUR PETS WERE REALY OUR "MINOR CHILDREN" MOST OF US "PARENTS" WOULD BE IN JAIL FOR CHILD NEGLECT
As a pet owner, do you need to have a pet trust or will in your estate plan? Well, maybe so, given - The Last Will And Testament - A Model NOT To Live By
The death of Anna Nicole Smith has at least one valuable outcome, even if it is simply serving as a - The British Constitutional Reform Act
The Constitutional Reform Act of 2005 changed the British hitherto unwritten constitution by in - Patented Drugs
While a drug or process is under patent, other companies are wary of working anything even remote - Divorce and Debt
As common sense and statistics tell us, the leading cause of marital discord is money. Therefore - The Misunderstood World of Corporate Minutes
The corporation is the most used form of business entity in the United States. While many people - Attorney for Legal Services
All of us hire lawyers at one point or the other. People get sued, arrested, charged for a crime, - Should Parents EVER Leave an Inheritance Outright to a Child who has a Disability?
Copyright © 2007 L. Mark Russell There are few absolutes in estate planning, but this is one. I