Now is the time to face the music

You might recognise the feeling – . something that’s been niggling you for ages – there are odd sums going out of your business account – you can’t reconcile them!

You know how defensive your business partner can be and you just hope the problem will go away without having a confrontation.

The trouble is that often, business relationships start so well, yet the foundations for that business do not cater for future unforeseen eventualities and a failure to deal promptly with an issue that has arised can be potentially very harmful to both your relations and to the business itself. 

However, in my experience, a route to resolution can generally be found even in the most strained of circumstances. Successful resolution can largely depend on the steps you take in the wake of the fallout and who you engage to assist you in resolving it.

Dealing with a fallout

When you’ve had someone cheat on you behind your back – whether that’s in work or in a personal relationship – there are generally two ways to move forward.

The first is to get emotional and upset and try to make the wrongdoer “pay” or to try to get “even”.

The other is to think logically and practically, taking a far more considered and proactive approach. This will almost always offer a more favourable conclusion in the long term.

It can be very easy in the first instance to let emotion take over and lead your actions. It’s understandable, particularly when someone close to you has breached your trust. However, it’s important that this doesn’t cloud your judgement.

What outcome are you looking for?

This is, perhaps, the key question to ask yourself when you find yourself in the midst of conflict. Getting “even” may be the tempting option, but is it really the right goal here? Take time to sit down and reflect on what outcome would really be best for you.

Do you want to buy out your fellow shareholder from the business and have them cease to be a director?

Do you want to walk away from the business in exchange for a fair value for your shares?

Having a clear goal will help define your route to resolution and identify the best steps to take to achieve it. 

A specialist barrister will be able to talk you through the dispute resolution process and advise on what, realistically, is achievable.

In my experience, often the most straightforward, efficient, and cost-effective way to resolve such disputes is to have one shareholder leave the company and receive a fair price for their shares. 

But it has to be effected in the right way; simply excluding a shareholder or director from the business can be potentially damaging.If excluding your business partner is really required a barrister experienced in these sorts of dispute should be able clearly to lay out how to achieve that

The path to resolution

• Have the right paperwork in place: If you already have a shareholders’ agreement in place this will likely include provisions that can be used to help reach resolution. For example, a shareholders’ agreement might contain terms that permit you to force another shareholder to sell their shares. Again, care needs to be taken to enforce such provisions and a barrister with specialist experience can help you iron out this detail. If you don’t have a suitable shareholders’ agreement, it is certainly worth putting one it in place before any conflict or dispute arises. Even if you have no shareholders’ agreement in place, you will have articles of association the terms of which might also assist in determining the appropriate way forward.

• Get access to specialist legal advice: Getting advice early on about your legal rights is the best way to ensure that disputes don’t escalate and that the path to resolution is as straightforward, cost effective and pain-free as it can be. It is generally preferable to resolve disputes by using negotiation strategies or through engaging in mediation. Again, your barrister can assist with this; trying always to ensure that sensible compromises are achieved while keeping relationships as intact and as amicable as possible. Of course, if things can’t be resolved through negotiation or via mediation, litigation through the courts may have to be considered as a final resort. Rest assured that if this is the route you end up taking, the right barrister will provide support throughout the process and keep costs transparent so that you enter into proceedings well-prepared, fully informed and confident.

For the majority, this will be the first time you might have faced a dispute within your business. If this is the case, you will no doubt have many questions and concerns as to what to expect and how you should go about seeking resolution.

Please do get in touch if you would like some more information or would like to discuss your own specific circumstances. An initial thirty-minute consultation is free, and I’d be very happy to advise you on the best steps to take to protect your interests and move forward.