How to Deal with a Controlling Business Partner

To deal with a controlling business partner, limit your communication to only your joint responsibilities, ignore their condescension, stand your ground, speak up when necessary, or exist the partnership when all fails.

Business partners can turn simple decisions into complicated debates when they become controlling. Business partners who always feel compelled to dominate can make running the business difficult and, sometimes, downright painful.

However, specific strategies are proven to work when dealing with controlling partners. How to Deal with a Controlling Business Partner?

Limit Engagement

Company partners often spend most of their workdays together and based on their shared duties, that time spent together is largely unavoidable. But many individuals also allow company partners to invade their personal lives.

Instead, partners should create and maintain boundaries between their personal and professional lives. Once the workday is over, there is no need to engage with a business partner unless extenuating circumstances exist. Enjoy the break and the perspective some time away from the person provides, and spend time with family or enjoy hobbies and relaxation.

Control Impulses and Reactions

Some aggressive or jealous partners attempt to provoke a reaction. So, one of the best things business owners can do is refuse to give in to their impulses.

If a controlling partner says something offensive, the normal human reaction is to correct them or strike back. However, try brushing it away or completely ignoring the individual’s comments. This tactic will make the controlling partner rethink their actions.

When individuals cannot overcome their anger, they should leave the room rather than engage in an argument or fight. Remember, when you grow angry, your controlling partner will succeed.

Resist Being Manipulated

When a partner wants to control the situation, they also seek to control their partner’s actions and thoughts. Sometimes, we deal with aggressive behavior by going along with it so as not to create a scene. However, avoiding conflict in this manner often leads to more intense clashes in the future.

Therefore, if a business partner demands something inappropriate or suggests something the individual knows is wrong, they must react. Be assertive: say “no” in a loud voice and calmly describe why the business cannot meet this demand.

When partners tolerate poor behavior, they give into it and perpetuate it. Individuals cannot allow themselves to be silenced or dominated.

Use One’s Voice

When controlling partners dominate a business, one danger is that the other partners will lose their intelligent, valuable ideas. This danger occurs because many partners refuse to volunteer their ideas in the presence of an overbearing individual.

Instead, all partners should speak their minds and share their ideas. If a controlling business partner thinks they have power, their behavior will grow worse. Show them that you mean business by coming up with a transformative idea, and perhaps they will rethink their attitude.

Return to the Partnership Agreement

Regardless of how much time has passed since the partners signed the operating agreement, its provisions still hold weight. Going back to an agreement created in better times can help remind all partners of their duties and talents. Psychologically, this action could also show the problematic partner that their behavior has changed for the worse.

Meet with the Controlling Partner

This suggestion may seem simple and insurmountable, but it is likely the most important.

Partners who act jealously or assume too much control often do so because their behavior is largely unchecked. Meeting with the individual and speaking openly and honestly can create instant changes. At the very least, a meeting will show the partner that you are serious about changing things, and it may provide evidence for a future trial if things deteriorate.

Ensure to address the partner’s controlling ways in the meeting and document what is said. Do not let emotions take over; stay calm and remain professional.

For example, Nick and Judd run a food truck in Santa Barbara, CA, but Judd is fed up with Nick’s controlling and jealous tactics.

When the two men meet formally, Judd voices his concerns. For example, Nick does not let Judd speak at meetings and often speaks over and second-guesses him in front of their employees.

Judd is standoffish at first, but then he admits that he is under a lot of pressure and going through a divorce. Judd feels as though Nick leaves all the cleaning and cooking to him, and Judd is stressed, overtired, and overwhelmed.

At the end of the conversation, both partners understand each other’s motives more clearly, and they resolve to give the business—and their clashing personalities—six more months to improve. In six months, the food truck is doing great, and Nick and Judd have dealt with their differences and moved on.

Sometimes, helpful dialogue is the solution to a personality problem.

Do Not Be Afraid to Exit the Partnership

While our last example presents a hopeful scenario, we must be realistic: some partnerships cannot be saved. When a partner refuses to change their controlling ways, sometimes it is better to walk away from the business.

All individuals need to realize two things: that their business goals are important and their mental health is also important. Business partners must sometimes leave toxic business partners behind. Individuals may dread leaving or dissolving the company they worked so diligently to create, but partners must prepare to end the business. After all, a better business venture may be around the corner that is not yet visible.

Example of a controlling partner in business.

Daryl and Jim are mutual partners of D and J Motors in San Diego, California. The company sells boats and engines, and the two men met in engineering school and, years later, formed a successful joint venture.

Jim has always been a people person and the face of the business. Some would say that Jim loves the spotlight. Daryl prefers this because he is happiest when out in the garage, fixing up old motors and boats.

During their fifth year of business, D and J were featured in a national San Francisco magazine article, and business took off. Local celebrities and even Hollywood stars visited the business, and profits tripled.

However, all was not right at D and J Motors. As business improved, Jim’s personality changed for the worse. He became moody and argued with Daryl often about minor details. If Daryl scheduled a meeting, Jim grew angry, but if Jim scheduled it, Daryl had to be there.

Jim also began criticizing Daryl at every turn. He told Daryl they’d be making more money if he were a better mechanic and blamed Daryl when something went wrong with the business. Jim was obsessed with more and more success, and he even threatened to buy Daryl out and hire a better mechanic. When Daryl attempted to speak with Jim, Jim said Daryl was overreacting.

Jim’s tendency to control every business decision and to make the company all about him alienated Daryl, who began to consider leaving the company. However, as Daryl considered allowing Jim to buy him out, he wondered if there were other strategies he should try first. Jim’s behavior was damaging, but should Daryl simply give up on the business he worked so hard for?

Usually, at some point in their business careers, entrepreneurs must deal with a controlling business partner. While working closely with someone who acts manipulative, jealous, and egotistical is not easy, it is also not easy to throw away a promising business career. So, what can business partners who are faced with this situation do?

This article will outline specific suggestions for effectively dealing with a controlling company partner and go over options for staying with the business and moving on. Since all of us will deal with aggressive business partners at some point, it is vital to understand what to do and what not to do.

How do you tell if your partner is manipulating you?

Not all controlling business partners behave the same way. Therefore, partners must be able to recognize damaging behavior in their partners.

Sometimes, the tendency is to explain this behavior by saying, “Tim is emotional today” or “Barbara is just having a bad day.” Still, when unwarranted behavior repeats itself over and over, partners must take action.

When individuals fail to notice their partners’ damaging and offensive behavior, the company is in danger. Clashing, resentful partners do not run successful, striving companies. So, what are some of these “red flags” that should cause partners to take notice?

The Partner Plays the Blame Game

Responsibility is different from blame. When a company performs well, every partner wants to take responsibility for the business’ strides. However, when a business suffers, it is often time for partners to admit that their decisions or actions were wrong.

Manipulative partners know how powerful blame is, and they use that power to put others down. Controlling business partners dole out blame to everyone but never blame themselves. Sometimes, the weaker employees, managers, and even partners believe that all of the company’s problems are their fault.

Usually, when a business flounders, it is everyone’s fault and cannot be heaped on one person. However, if partners continually hear their partner saying, “it’s all your fault,” or asking, “why did you do this?” they may have a manipulative partner with bad intentions.

The Partner is Talented—at Criticism

Domineering business partners know that when they critique their partners’ words or actions, they weaken their confidence. But, in doing so, they avoid blame.

Some business partners seem to always be there when individuals make mistakes but never when they do something right. When a business partner continually criticizes another’s actions, they poison the partnership and make the person constantly second guess themselves.

Healthy criticism plays a valuable role in positive partnerships. We do not learn from constant praise—we need to know what skills can be improved. However, a red flag is clearly visible when a partner never reacts positively. Criticism is also a key to controlling others, as well.

The Partner Gaslights the Other Partners

We often hear the term “gaslighting” mentioned in the media, but that does not mean it is not a form of emotional abuse. When one individual “gaslights” another, they make them second-guess themselves.

For example, Paul and Dre are partners at a Los Angeles law firm. Paul continually insults Dre, and his behavior grows worse and worse. When Dre finally confronts him, Paul says Dre is “overly sensitive” and “making things up.” Paul repeats these phrases until Dre questions himself. Dre wonders: am I overly sensitive? Did this happen?

Gaslighting successfully undermines peoples’ emotions and is a powerful defense tactic.

The Partner Enjoys Intimidating Others

Sometimes, individuals are not aware that their partners control them. Intimidation is one of the ways that partners control others. Partners who purposefully intimidate other partners will often:

Talk down to them
Threatens them in joking terms
Act superior
Undermine them at every turn

The Partner’s Moods Fluctuate

When entrepreneurs notice that their partner’s mood is never stable, this may be a warning sign that they are either undergoing psychological stress or trying to control things.

Some partners act this way on purpose: they know that if they constantly change their persona, their partners will never be able to predict their actions. As a result, controlling partners want to be unpredictable, and many want to inspire fear.

If individuals notice unpredictable behavior, bizarre emotional states, or abusive behavior, they should take these warning signs seriously and alert the other partners and possibly the authorities. It might be smart to check in with the family of the controlling partner, too.

They Always Want to go Their Way.

Difficult partners do not accept “no” as an answer. They have a plan, and if the other partners do not want to stick to it, they do not care. They do not worry about personal boundaries, and sometimes they do not even care about the company as much as they do their desires.

Controlling partners are also talented manipulators. They may have risen to the top because of their powers of persuasion, but their concerns are self-motivated. They can convince people of nearly anything, but they place themselves first and the business second. In doing so, many controlling company partners perpetually violate their fiduciary duty.

They Get Jealous

Business partners should be able to share in each other’s successes. A strong business in any industry is built on individual accomplishments and collective goals. Powerful, profitable companies also depend on supportive atmospheres that encourage growth.

Therefore, if one partner is always jealous, this is a warning sign. Feelings of insecurity often accompany jealousy. Jealous partners usually feel inadequate, searching for situations they can control. Jealousy is a toxic trait that can quickly damage a workplace.

For example, Kyle and Thomas run a coffee shop in Mission Beach, California. Kyle is excited because he has a fantastic new idea that will lead to more exposure. He wants to give out tiny cups of their new coffee blend on the beach. Kyle thinks the early-morning surfers, joggers, and bikers will return to their coffee shop.

When Kyle tells Thomas, Thomas grows angry. Thomas knows the idea is excellent but refuses to admit it. Why? Because Thomas is a controlling business partner who is upset that he did not think of the idea first. If Thomas continues acting like this, the partners’ coffee shop will not achieve its potential.

They Never Get Enough Power

Controlling partners sometimes are mistaken for overachievers. But, sometimes, their controlling and manipulative actions helped them climb the corporate ladder in the first place.

However, when a company partner tries to do the business exactly what they want, they are excluding everyone else’s views. Unless it is a sole proprietorship, a business is a collective.

Controlling partners exhibit behavior full of warning signs, so be on the lookout for:

Partners who urge people to change their personalities
Partners who provide others with unsolicited lists of things to accomplish
Partners who degrade others’ dress, speech, and behavior

For example, Judy and Therese are business partners on their way to an important meeting. On the way to the meeting, Judy eyes Therese’s skirt, shirt, and pumps and says, “Are you wearing that to meet the client?”

This simple yet toxic remark doesn’t simply stress Therese out. It creates doubt. Therese’s presentation flops, the business does not secure the client agreement, and Therese blames herself. On the other hand, Judy is happy because she exercises her power.

This example may seem extreme, and while it is simplistic, it accurately represents how toxic business partners act daily. Of course, business partners must deal with their controlling counterparts to prevent them from damaging the company, but what if it is time to dissolve the business and move on?

What Are the Steps to Dissolving a Business?

Business partners should attempt to work things out amid a dispute, and we have provided several suggestions. However, sometimes business partners realize that they must make dramatic changes. Sometimes, business partners know that the personality conflict is not going away, and they must do what is best for themselves and their careers.

When dialogue with a partner is impossible, or the conversations do not yield any solutions, it is time to end the partnership. Dissolving a partnership consists of two unique stages: these are the period before dissolution and the process of dissolution itself.

What Are the Necessary Steps for Pre-Dissolution?

The pre-dissolution phase centers on preparatory work. Here are the actions to take before the business partners dissolve the company.

Review the operating agreement

Partnerships begin with operating or partnership agreements, and these founding documents are just as important when the partnership has run its course. Normally, a partnership agreement includes information and provisions regarding how the partnership can be dissolved. All the involved partners should study these instructions so they can come to a uniform consensus.

While most funding agreements include terms of dissolution, some companies did not begin with a partnership agreement. Therefore, the business partners must meet and agree on proper dissolution procedures in this case. This conversation can be difficult for partners who disagree, but an attorney can help the parties reach an agreement.

Check on the Company’s Finances

Before bringing the business to an end, partners must check the company’s financial picture. Again, bringing in a professional helps to make assessing the business’ finances more manageable, especially during a busy time.

Partners must figure out how much money the business currently has and how much capital will remain after splitting up the assets along with business partners and paying out the company’s remaining debts and liabilities.

When considering the financial state of the business, partners should be sure to closely go over:

-Liens that remain

-Any mortgages that must be paid

-Contracts that must be paid

-Other outstanding obligations

Also, partners should determine if unfinished work or clients must be dealt with before they end the partnership.

Check on Property Loaned to the Business

Partners often loan personal property to their companies, and this property must be added to the dissolution process. Usually, these properties are covered in the partnership agreement or in provisions that the partners add over time.

If a partner finds that the property is not in its original condition, then the partner is entitled to damage compensation and should be sure to make a note of the issue.

If the property is not included in the partnership agreement, the business partner who loaned the property should locate the loan documentation. These documents will help strengthen the partner’s claim when they want their property back.

Set Up a Meeting with a Business Lawyer

There is no better time for partners to meet with a business attorney than when business dissolution looms. However, do not be surprised if each business partner hires a separate attorney for help with the process, especially if a dispute fuels the dissolution.

An experienced lawyer will help company partners negotiate every step of the dissolution process, from the first setup phase to when the partners say goodbye to the business and each other.

Have a Conversation About the Dissolution

When one partner is controlling or manipulative, it is difficult to have a productive conversation about the business. However, partners need to discuss the terms of the dissolution with each other before ending the business. This dialogue will prevent any surprises from occurring and limit the chances for additional disputes. When the business partners know what to expect from the dissolution, they can focus on finishing the process and moving on.

If the partnership agreement does not include dissolution terms or there is no agreement, then the partners must agree on the dissolution terms before proceeding with the process.

Use a Mediator if Necessary

Often, business partners who do not get along anymore struggle to agree on the terms of dissolution. For example, some partners cannot find common ground in paying debts or sharing liabilities. Other times, business partners disagree on the company’s financial picture and how to spend the remaining money.

While partnership agreements can help guide partners through these decisions, some companies either do not have operating agreements or have incomplete ones. Plus, dealing with a controlling partner one-on-one can be difficult, even for the most determined and rational partners.

Hiring a mediator is an inexpensive solution that can help partners successfully make it through these final stages. Neutral third parties can listen, make suggestions, and remove emotion from the decision-making progress. If business partners struggle to make productive decisions, they should contact a mediator. A mediator can be the difference between making a successful mutual agreement and wasting time arguing over the terms of the dissolution.

What Are the Steps to Phase Two of Dissolution?

Once the dissolution process begins, there are a lot of different tasks to keep track of. Here are the most important steps.

Sign the Dissolution Agreement

The business partners must draft an agreement detailing the dissolution of the company. This document must be certified and signed. When it is finalized, the document signifies the end of the business partnership.

It is important to have an experienced business attorney on hand to help partners draft the agreement and certify it. In addition, if one partner is difficult to deal with, the presence of a lawyer can also help keep them in line and keep the process moving forward.

Formally Dissolve the Company

All partners must vote on the dissolution of the company, and all partners must follow the terms established in the partnership agreement. The vote must be recorded as well.

Terminate All Credit Accounts

Dissolution occurs during a busy time, and some business partners forget to cancel some of their business credit accounts. Ensure that all company bank accounts and credit accounts are paid off and closed so that no debts follow the partners after dissolving the company.

When dealing with a toxic partner, there is always the risk that the person will purposefully create more debt before closing the partnership. These actions may be fueled by greed, resentment, or both, but closing accounts promptly prevent these acts from happening.

Take Care of Company Liabilities

Before the business is no more, the partners must ensure that they have paid all their debts. If debts are unpaid, these problems can follow partners in their business careers and damage their credit. To ensure all outstanding debts have been paid, try paying off creditors before reimbursing any business partners—this will speed things along.

Pay Out the Partners

Once the partners and their attorneys have sorted out the company’s debts and liabilities, it is time for them to split up the remaining company money.

The partnership agreement should include instructions regarding divvying the business’s remaining capital and profits. However, if no agreement exists, the partners must reach a consensus regarding each partner’s payout amount and schedule.

The conversations can grow aggressive and emotional when partners in a dispute discuss payments. A mediator, an attorney, or both can help streamline the process and focus on outcomes instead of blame and anger.

Reclaim Partners’ Property

Now is the time for business partners to reclaim their property. Sometimes, individuals forget this step in the dissolution activity flurry, so note it. Also, this is the time for partners to repossess their property if needed.

Need Assistance in Dealing with a Controlling Business Partner? Contact Nakase Wade Today

Even business partners who accomplish many mutual goals sometimes get into trouble. Human beings are vulnerable to emotions, and people also change over their lifetimes. Sometimes, business partners find themselves involved in troublesome disputes that are simply irreconcilable.

Often, disputes are caused by manipulative or controlling business partners. When one’s partner behaves negatively, the entire business can be down. However, if the other partners handle the situation with restraint, make practical choices, and contact an experienced attorney, they do not need to worry.

If your business partner has become controlling or the relationship has become toxic, we encourage you to try to remedy the situation before dissolving the business. Conversation and mediation are excellent ways to overcome the divisive personality issues that sometimes plague partnerships.

However, sometimes the business must be dissolved so everyone involved can move on. Our California business lawyers and corporate attorneys have helped many business partners negotiate successful dissolutions, and we are here to answer all your questions about the process.

In life and business, conflicts are unavoidable. However, business partners cannot allow controlling partners and business disputes to damage the companies they have worked hard for. Hopefully, the above tips will help you solve the problems caused by toxic business partners.

For further help with business disputes, questions about dealing with controlling business partners, or legal questions of any nature, contact Nakase Wade.

In the initial free consultation with our team, we will examine the company’s documents and note all relevant details. Then, we will provide you with options and listen to your decision.

We do not tell our clients what to do—we listen and provide choices. Every client is different, and every relationship among partners is just as unique. Our goal as a law firm is to secure the outcome you are hoping for, so you can return to pursuing your business goals.

Contact Nakase Wade today, and let’s confront your controlling partner immediately, so you can keep moving forward.

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