Why it is essential for partner to trust each other? Is there any legal angle to this?

Answer 1

In a business, there are lot of things going on. In case there is a trust gap between the partners, they will be involved in spying on each other, making sure the other partner is delivering on his/her role, if there is any fund misuse etc.
So the focus goes from growing the business to internal crisis management.

Comments

Any legal angle to this?

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Mostly the issues should be solved by mutual understanding. But in case the problem escalates, the other partners(assuming that they are also directors) can remove the non-performing partner, through some board resolution/voting.

For eg. Steve Jobs being a co-founder of apple was shown the door by the Board of directors because they couldn't see the value in the excessive spend by Steve jobs on his projects.