1400 Gables Ct #103 Plano, TX 75075
5601 Bridge Street, #300, Ft. Worth, TX 76112

Why does a “good” partnership or company split up? (Part One)

What causes a terrific company to morph into a hideous  caricature of the fondest dreams of its founders? How come shareholders, partners or members sometimes must retain experienced business litigation firms, like Armstrong the Law Firm, P.C., to handle disputes among people who all originally shared the same vision and conviction that their company succeed?

Very frankly, it is the failure to set and control expectations at the outset.

Every limited liability company (“LLC”),  partnership, corporation, or limited partnership is comprised of people who united to form the new business.  At the starting line, each of them sought to invent or deliver to market the next novel idea, great product, or improved process.  Whether the business launched in a garage or from seasoned industry magnates deciding to pool their talents, a new business reflects the aspirations of its principals to achieve something better than their competitors, and to build something better for themselves.

So, to return to the question: What causes friction between a company’s members, partners, or shareholders?  How does the business descend from a dreamed-of world leading enterprise to a petty, frustrating battle over control of the business, its customers, hard assets and intellectual capital? How can it degenerate into a fight so bitter that people who worked closely together for many  years, begin pursuing theft of corporate opportunity, appropriating the business cash for selfish purposes?  Could it be fear?  Or, perhaps greed?  A philosophical belief that the most altruistic of efforts never last, so I should “get mine while I still can?” I have found that the truth has nothing to do with ideals or philosophical constructs.  Most often, it is members’ aversion to doing the hard up-front work of meticulous planning, making tough decisions in advance, and obtaining wise, steady counsel to pilot them through the effervescent feelings of starting a venture.

[Continued in Part Two next time].

www.planobusinesslawyers.com

Richard Armstrong, Principal

Richard Armstrong, Principal

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Armstrong The Law Firm, P.C.
Plano Location
1400 Gables Ct #103
Plano, TX 75075

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Ft. Worth, Texas 76112

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