Persons who own businesses together have obligations to the company and their co-owners. These obligations fall under the general characterization of fiduciary duties. But what are fiduciary duties?
Fiduciary duties are the legal requirements for an owner to act in the best interests of the company, to refrain from engaging in competition with the company, and to put the company's best interests ahead of the individuals. The Minnesota Court of Appeals opinions refer to the duty as the "highest standard" that an individual must recognize.
But, like other obligations, this can be waived. As an owner, you must choose your words carefully. You should not rely on a hindsight characterization of a waiver as having been made in jest. It looks like sour grapes and should fail in court. By waiving the obligations, you are giving your partner a license to go out and compete with your business.
Business deputes are like divorces. They are not good, get too involved with emotion, and rarely end up with the partners talking to each other. If your business looks like it is heading for a divorce, call to get help earlier than later.
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