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A Lesson from Fifty Shades of Grey (no, not that kind of lesson...)

Posted by Elizabeth Gore-Jones on 8 February 2016

Whilst women (and men) around the globe learned many an interesting lesson from Fifty Shades of Grey, that is not the kind of lesson we can really discuss in a law blog....

Oddly enough though, a business lesson (not of the whips and chains ilk) can be taken away and hopefully it prevents expensive commercial mistakes being made in the future, although I sadly doubt it.

The back story is one of trust and alleged betrayal so it may itself become a movie all on its own.

It is a long story so in bullet point format for easy reading it is as follows:

  • associates/friends form a business
  • associates/friends do not document business relationship
  • one associate (no longer friends at this stage) alleges she was the sole owner of the business and the others were merely employees or volunteers or something like that
  • one associate claims they were partners
  • one associate pockets about $40 million
  • one associate pockets about $100,000
  • everybody ends up in court to fight it out

Lesson to be learned - document your business relationship whilst everybody is still friends.  It is too late to document the arrangement when you all fall out and hate each other.

When documenting your arrangement, record everything including:

  1. how money is to be contributed
  2. how profits are to be distributed
  3. an outline of each party's role
  4. when you will sell the business (preferably for a huge return)
  5. what the business does
  6. how decisions will be made

Not only will such an agreement be helpful if you do fall out, it may actually prevent you from falling out.  If you have the difficult conversations at the beginning and it is all recorded then this may save resentment from arising and leading to a breakdown in the relationship.

Now back to that erotic fiction writing....

Author: Elizabeth Gore-Jones
About: Elizabeth specialises in franchising law. She lectures at Bond University PLA in franchising, she sits on the Queensland Law Society Franchising Committee, she is a past member of the Women in Franchising committee and a past member of the Franchise Council of Australia.
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Tags: Business

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