Equal share partners without equal commitment

[Karlssen]

I started my business 2 years ago with 3 other partners having equal stake in the company. 2 years ago we didn't anticipate the possibility of each partner placing a different priority on our business. Now, we have 1 member who is going to school full time for his MBA, which will obviously benefit the company. The problem is that this also has become his priority. The important tasks that would normally be completed by this partner take twice as long, and sometimes never happen. I'm curious to know if anyone else has had a similar experience or any advice on how to handle the situation?

[BusinessAdviser]

How can you deal with this according to your operating agreement?

[ciaossu]

How exactly did you guys structure the equity in the company. Is it a corporation and you allocated shares? The correct way of doing it would have been through vesting. IF you are lucky, and you are indeed a corporation, there is still a way to correct this if the actual shares have not been allocated (they must be done legally and you would have known this), and it all comes down to negotiations between the partners at that point.

[Online Money Hut]

I haven't had that problem before but it sounds like you may need to have a contract which spells out the responsibilities. If a partner isn't able to meet those responsibilities then another contract will need to be created. The purpose of the contract is to prevent emotions from being involved in the teamwork. Everyone that signs a contract of agreement in terms of responsibility understands that they are the ones that set that commitment and that they must be held to it. If that person is unable to do it then you have to make changes. The reason I haven't had that problem is because I use contracts of agreement that states the responsibilities of each partner.

I've seen many online and offline businesses fall apart because no contract was created. It's the same way it works when you are getting a job. You sign a contract saying that you will be responsible for completing or assisting with certain tasks.

Frederick
OnlineMoneyHut.com