Chicago, IL asked in Business Formation for Illinois

Q: What should we do if my business partners and I disagree about the basic business structure setup for our restaurant?

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1 Lawyer Answer
T. J. Jesky
T. J. Jesky
  • Chicago, IL
  • Licensed in Illinois

A: I always tell my clients that you want an odd number of Directors on the Board of Directors. Too many times an even number of Directors face a stalemate, where no decision can be made. Perhaps that's the solution to your problem. You need an odd number of partners, where your Articles of Organization have a provision on how a deadlock vote can be decided. I am not sure if your are LLC or Corporation. Regardless, you need to agree upon an Organizational structure or By-laws that state how to break a deadlock.

Here is my fear, in the question you pose. If your business partners cannot agree on the basic business structure, what is going to happen in the future, when the business in up-and-going and you face some tough business decisions. If you have these problems in the beginning of the business, I do not seeing these disagreements fading away in the future. They will probably become worse. You might want to consider finding new business partners, or not include the dissenters.

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