SPANISH

CAN A 50/50 BUSINESS PARTNERSHIP BECOME WORSE THAN A DIVORCE?

By Juan V. Fanti, MBA, CAA, PA

Choosing a business partner can be much more like choosing someone to marry than many entrepreneurs realize.

In the beginning, everything usually looks promising.

There is an idea, mutual trust, enthusiasm and expectations of making money together.

Then someone says:

“Let's make it 50/50.”

It sounds fair.

But very few people ask the most important question:

What happens three, five or ten years from now if one partner wants out and the other refuses?

That is when the real problems can begin.

Starting a company may be easy. Ending one can be very different.

Social media is filled with videos explaining how anyone can create an LLC quickly and inexpensively.

Filing a form may indeed be easy.

But properly structuring a business involves much more than registering a company name with the state.

Who owns the company?

Who manages it?

Who has signing authority?

How are profits distributed?

Which decisions require unanimous approval?

What happens if one partner dies, becomes incapacitated or wants to leave?

And what happens when the partners simply cannot agree anymore?

These questions matter.

The 50/50 problem

Consider two partners who each own exactly 50%.

As long as they agree, everything may work perfectly.

But suppose the business stops working.

One wants to dissolve it.

The other refuses.

One wants to sell assets.

The other objects.

One wants to stop operations.

The other wants to continue.

The company may now face a deadlock.

Neither partner necessarily has enough voting power to overcome the other.

What started years earlier with enthusiasm and a handshake can eventually involve accountants, attorneys, banks, creditors, tax returns, business assets and potentially the courts.

Dissolving a business can sometimes feel worse than getting divorced

Divorce has an established legal process for separating two spouses.

A poorly structured 50/50 company can produce difficult questions about who has authority to do what.

Who controls the bank account?

Who can sign?

Who can sell assets?

Who keeps the records?

Who handles outstanding liabilities?

Who prepares the final tax return?

Who can authorize dissolution?

And what happens when one partner simply refuses to cooperate?

Florida law provides remedies in certain circumstances involving member or manager deadlock and judicial dissolution, but reaching that stage can mean significant legal expense, time and disruption.

This is when the Operating Agreement suddenly becomes extremely important

When business is going well, an Operating Agreement may seem like just another document created when the LLC was formed.

When conflict begins, it can become one of the company's most important documents.

A properly prepared agreement can address management authority, voting requirements, banking authority, withdrawal of a member, buyouts, deadlocks, disability, death, allocation of assets and liabilities, and procedures for winding down the company.

Florida law expressly recognizes operating agreements and their role in governing the relationship among members and the LLC, subject to statutory limitations.

That is why an Operating Agreement should not automatically be treated as just another generic Internet template.

“I already opened the company. Did I do it correctly?”

Accountants and business advisors hear this question frequently.

Someone creates the company first after watching a video or following instructions online.

Then comes the call:

“Can you check whether I did it correctly?”

Or worse:

“I have a problem. How do I fix it?”

Sometimes documents can be corrected.

Sometimes the structure needs to be reorganized.

In certain circumstances, starting over properly may be more practical than continually repairing an incorrectly structured entity.

And when a serious ownership dispute already exists, the appropriate recommendation may be to consult an experienced business attorney.

You are not simply paying someone to complete a form

When you hire an experienced accountant or business advisor to assist with structuring a company, you are not simply paying someone to enter a name and address into a state filing.

You are also paying for something that does not appear on the application:

experience.

Experience with businesses that succeeded and businesses that failed.

Partners who began as friends and eventually stopped speaking.

Family businesses.

Tax problems.

Business dissolutions.

Partners who wanted to leave but discovered they had never agreed on how an exit would work.

Professional experience helps identify problems before they become expensive problems.

Before choosing your partner, think about how the partnership could end

Nobody gets married expecting a divorce.

And nobody starts a company expecting to fight with a business partner.

That is precisely why agreements matter.

A good Operating Agreement does not mean you distrust your partner.

It means both partners establish the rules while they still trust each other.

Because once the conflict begins, it may already be too late to negotiate them.

Before asking how little it costs to open a company, perhaps the better question is: How much could it cost me if I open it incorrectly?

---

ASK THE ACCOUNTANT

Are you considering starting a company with a partner?

Do you already own a 50/50 LLC?

Do you know what your Operating Agreement says if one partner wants out tomorrow?

Juan V. Fanti, MBA, CAA, PA
Two Hundred Global Financial Solutions – 200GFS
📞 +1 (954) 683-3578
🌐 www.200gfs.com

This article is for general educational purposes and does not constitute legal advice.