Starting a family business is a time-honored tradition and a sense of pride for many families. However, it can also be a nightmare. Whether your business is the latest Asian-fusion restaurant or a construction company, hiring the services of a business law firm such as Spector & Ehrenworth, P.C., can help keep your family relationships intact and your business running smoothly. Here are seven pitfalls that a business lawyer can help you avoid if you plan to go into business with your family.

1. Ownership Problems

Things such as going into business with someone who is married may have legal ramifications on the business. What happens if that person gets a divorce? How much is their spouse entitled to?

2. Having No Exit Strategy

The time to plan for an exit strategy is when you start. You must plan for anticipated retirement and the long-term fate of the business.

3. Not Hiring Non-Family Members

Sometimes, there is no one in the family who has the necessary skill set. You may want to keep everything in the family, but it is always best to have someone on the team who knows the business inside and out.

4. Not Having Clearly Defined Roles

Families are dynamic, and it is often expected that everyone will do whatever is needed for the business. Having clearly defined roles can help avoid misunderstandings.

5. Co-signing Loans and Lending Money

These agreements are often entered in the best faith, but sometimes things go wrong. Money lending in families can tear them apart.

6. Sharing Power

Sharing power is asking for trouble, particularly when you consider the power dynamics in families that occur when the younger generation is now in charge.

7. Mixing Family and Business Relationships

This is perhaps the most difficult pitfall to avoid. It is also the reason why many family businesses breakup, taking family relationships with it.

Spector & Ehrenworth, P.C. can help you navigate the waters of starting a family business and help you balance professional and personal relationships. To schedule an appointment to speak with a business attorney, call (973) 845-6525 or e-mail info@selawfirm.com.

The grounds upon which a partnership may be dissolved are typically set forth in a written partnership agreement. A partner may file an application in the courts to dissolve the partnership if the grounds for dissolution, as set forth in the partnership agreement, have been met.

In addition, the New Jersey Uniform Partnership Act permits any partner (even if there is no partnership agreement) to file an application in the courts to dissolve the partnership based on the following grounds:

1. the economic purpose of the partnership is likely to be unreasonably frustrated;
2. another partner has engaged in conduct relating to the partnership business which makes it not reasonably practicable to carry on the business in partnership with that partner; or
3. it is not otherwise reasonably practicable to carry on the partnership business in conformity with the partnership agreement.

When presented with an application to dissolve a partnership, the court will evaluate the relevant circumstances and determine whether dissolution is appropriate and fair to all parties. In such instances, the courts have broad discretion to order the dissolution of the partnership or to fashion some alternative remedy (such as the appointment of a receiver).

Spector & Ehrenworth, P.C. has extensive experience advising partners with respect to filing and opposing applications to dissolve partnerships. If you are considering filing such an application (or if your partner has filed such an application), attorneys at the firm would be happy to discuss with you the specifics of your case and advise you with respect to your legal options. To schedule an appointment to speak with a business attorney, call (973) 845-6525 or e-mail info@selawfirm.com.