Despite attorneys crying 'beware of the 50/50
partnership,' business owners often find themselves, and
insist, on that exact relationship. 'Fifty-fifty seems
right,' they say. 'We are immune from the pitfalls that
plague others.' In my experience, 50/50 partnerships
(especially when a business is just starting) are a reality. A good
attorney, however, should have the tools ready to help those eager
business owners avoid the most common problem of a true fifty-fifty
relationship: unresolvable deadlock.
Of course, 'fifty-fifty' is itself a vague term, and
when business owners say they want to own the business fifty-fifty,
a good attorney should seek to clarify whether they mean that
voting power will be split evenly between both of them, or, as they
more often mean, rights to the distributions of the profits will be
split evenly among them. Owners can be surprised to learn that in
limited liability companies – or LLCs, the form most new businesses operate
under- an
