Family-Owned NJ Partnerships Must Be Aware Of Potential Problems That May Arise

HNWBusiness Law, Partnership Rights Litigation

By Fredrick P. Niemann, Esq., a NJ Partnership Attorney
 Family-owned and run enterprises have been the cornerstone of American business for a long time. While there are many great success stories, some family-owned businesses have been forced to face unfortunate situations that arise due to the unique structure of these enterprises. Family-run partnerships face several disadvantages that all should be aware of. This way if they do arise, partners will be able to address these issues in the appropriate manner and avoid or minimize the harm caused to the business.
 The first disadvantage to NJ Partnerships is the opportunity for majority oppression. Due to the closed nature of many family-owned partnerships, certain partners that own a larger percentage of the partnership have the opportunity to oppress the lesser partners. Perhaps an older sister who is the majority partner decides to favor herself in a business decision to the detriment of her three younger siblings who are minority partners. Oppression of a minority partner can take many forms, including withholding business earnings, paying uneven salaries, or even “freezing out” or “squeezing out”, actions involving the majority partner using oppressive and preclusive devices to force minority partners out of the business entirely.

New Jersey family-owned partnerships must also be wary of personal family problems entering the workplace. Family members unfortunately may let disagreements, ego, trust issues, and other problems on the home front enter the office. Family disputes may take precedent over the business, which can without a doubt prevent your partnership from reaching it’s full potential.
In cases where a parent is in a partnership with their children, sometimes the elder refuses to give up power. This can be due to a number of reasons, including a fear of reaching a point of needlessness or disbelief that the partnership can fully function without them at the helm. Sometimes, these elder family members will refuse to listen to advice, dismissing the suggestions of other partners and even disregarding them entirely under extreme circumstances. The opposite of this is a feeling of being undervalued by the individual next in line to run the partnership. This feeling of discontent by any of the partners can be an obstruction to the decision-making process and ultimately harm the partnership.
Contact me personally to discuss your NJ Partnership matter. I am easy to talk to, very approachable and can offer you practical, legal ways to handle your concerns. You can reach me toll free at (855) 376-5291 or email me at

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