In an ideal world, business partners get along and agree on all aspects of running a company. However, even the best partnerships can experience disagreements.

Often, these disputes lead to complicated litigation that can drain your finances and cause you harm professionally.

Including protections in your partnership agreement and relying on an experienced business attorney is crucial.

Defend Your Company’s Interests

Going into business with a partner means that you have shared interests in the company. However, there are also times when disagreements arise. These differences in opinion can cause problems for the partnership.

These disagreements frequently originate from a fiduciary obligation being broken. Partners are prohibited from putting their financial interests ahead of those of the firm by law, which requires them to behave in the company’s and its shareholders’ best interests.

If a controlling shareholder breaches these duties, the minority shareholders can file a lawsuit against them for damages. However, you should only use this as a last resort if all other options have failed.

Sometimes, a majority owner can force out a problem shareholder using a freeze-out merger. These are legally permitted under state law but must be conducted carefully to avoid legal complications. You can settle these problems and safeguard your company shares with the aid of an accomplished partnership dispute lawyer.

Resolve the Dispute as Quickly as Possible

Partnership disputes become emotional battles filled with feelings of betrayal and disloyalty. The bitter fighting often obscures the original complaint and can cause unnecessary legal fees.

To help prevent partnership litigation, a company should be careful to clearly define the issues in an effective partnership agreement crafted by a skilled lawyer. This document can specify how differences will be resolved and also may include specific procedures for buying out a partner.

Some partners must improve at keeping personal assets, and funds separate from the business, causing the company to drain its resources or run up its debts. This can hurt the company’s profitability and brand reputation.

If a partner is poaching customers, violating company trademarks or copyrights, or damaging the business’s goodwill, it is crucial to determine how to stop the behavior quickly. A qualified attorney can advise seeking a court action, such as an injunction, to prevent the problem.

Keep Your Company’s Assets and Funds Separate from Your Partner’s Assets

Keeping your company’s assets and funds separate from your partner’s assets is vital as a business owner. This is a critical safeguard against fraud, theft, and embezzlement. If one of your partners struggles to separate their personal and corporate assets, it could eventually cause problems for your organization.

Setting up explicit agreements with your partners at the start of the relationship is an excellent method to avoid this. These agreements may specify essential issues, including pay and profit-sharing arrangements, dispute resolution procedures, etc.

If there is a dispute between partners, a business lawyer can help you review written agreements or state laws that govern the matter and determine the best course of action. If you cannot reach an agreement, you can also pursue a freeze-out merger with the minority shareholder to force them to sell their share in the company in exchange for cash.

Resolve the Dispute Through Mediation

While it is impossible to prevent all disputes, a partnership agreement can provide a roadmap for proceeding should a dispute arise. These agreements often include provisions for mediation or arbitration in the event of a conflict.

It is essential to resolve a partnership dispute internally before taking more drastic measures. Often, these disputes stem from misunderstanding or confusion and could be corrected with an objective discussion between both parties. A mediator can help the two partners focus on their issues and find solutions to benefit everyone involved.

If the disputants cannot agree on their own, a judge can order them into mediation or arbitration to attempt to settle the matter before allowing it to go to trial. Moreover, a mediator can ask the disputants questions about their positions that can expose each party’s underlying interests. This can allow both parties to think creatively about a resolution and keep the internal dispute out of the public eye if it is resolved outside of court.

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