When starting a new business, you need to carefully consider many decisions such as where to locate, what type of services to offer, how much equity each owner gets, and what pricing and business models to use. But did you ever think you should be concerned about your partner’s spouse? The bankruptcy attorneys at Behm Law Group, Ltd. believe such a consideration should be duly noted in the Mankato, MN area.
You might think this doesn’t matter because you are going into business with your partner, not their spouse. But consider these questions before you sign on the dotted line and commit your capital to the business venture.
- What if the spouse has undue influence over your partner’s decision-making abilities?
- Does the spouse have any experience in or knowledge about running a business?
- What if the spouse is designated as a successor in the business should your partner suffer an untimely demise?
- Is spouse difficult to work with when in a position of power?
- Does the spouse share your and your partner’s vision for your business?
Of course, you want to trust that your business partner will be able to keep their professional and personal relationships separate for the good of your business. But you could find yourself in an uncomfortable situation if you don’t take some precautions in your business agreement:
1) Make sure all business owners in your venture sign a business agreement which addresses all aspects and possibilities for your business. Leave nothing to chance.
2) Define the spouse’s role in your business. How much influence, if any, a spouse would have? Can he or she make decisions? Can a spouse become an owner? If an owner, what are the terms for selling the spouse’s share?
3) Address the potential need for bankruptcy. At what point should the discussion of bankruptcy be brought up? Who makes the final decision to declare bankruptcy?
Whether you’re contemplating a business agreement or have already filed for bankruptcy, seek our counsel at Behm Law Group, Ltd. We specialize in bankruptcy in the Mankato, Minnesota area and can offer you sound advice for making the best decision regarding bankruptcy for your business before it’s too late.