A business partnership is a commitment between two or more people to work together toward a common goal. Much like a marriage, both parties thrive on communication, loyalty and consensus.
Sometimes, partners disagree on important decisions and they can’t find a way to move forward. This situation is called a deadlock, and it can hurt even the strongest businesses.
How this happens
A partnership deadlock happens when partners can’t agree on a key business decision. This often occurs when partners have equal say and disagree on things like the business’s direction, how money is handled or how the business is run day-to-day.
One example of this would be if partners in a clothing boutique don’t see eye-to-eye on whether to start selling their products online. One partner might see e-commerce as essential for expanding their reach, while the other prefers to focus on their brick-and-mortar store.
Because they have equal ownership and decision-making power, neither can move forward without the other’s agreement, resulting in a deadlock.
How partners can move forward after a deadlock
A deadlock prevents the business from working smoothly. That’s why it’s important to find common ground as soon as possible. If the partners can reach a mutual agreement, they can try several strategies to break the deadlock, such as revisiting the partnership agreement, engaging in mediation or bringing in a neutral third-party consultant. These options can often be pursued without legal intervention.
However, if you’re experiencing a persistent deadlock that threatens your business or if communication has completely broken down, you may need the help of an attorney experienced in business law. Consider seeking legal counsel early on to explore all available options and protect your business interests.
Protect your partnership’s future
In a business partnership, the business’s success should always be the priority. Deadlocks threaten that success. If you’re facing a deadlock, you should find a resolution immediately to protect your partnership’s future.
