Hello, I’m Jeff Babener, Editor of MLMLegal.com and I’d like to speak with you today about creating clear agreements between company owners. It is one thing for a MLM business to fail because of regulatory, legal, or financial challenges, but periodically, the industry is aghast when a MM company fails due to a dispute among company owners. Unfortunately, such events have occurred. The causes for such failure occurs because the business owners did not at the time of inception take sufficient care to outline their respective rights and responsibilities.
It may be a legal matter, but then again it is often a case of differing expectations about the future of the business. These expectations should be out in the open at the commencement of the business and mechanisms for dynamic change should be anticipated, including exit strategies for owners. The worst case scenario, which has occurred, is paralysis of the business while owners argue over management objectives. Obviously this problem cannot occur when there is one principal owner to the business. It tends not to occur when there are two owners. Three owners tend to produce a revolving alliance of two against one. More than three owners may well be a prescription for future disputes. In any event, managing expectations starts at home and at the beginning of the business.
Wishing you the best in your direct selling business, I’m Jeff Babener.
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