Most Common Reasons for Partnership Disputes
A California partnership disputes lawyer helps partners who own a company together to find ways to come to consensus when a disagreement arises, A conflict among business partners could impact normal business operations in adverse ways and could be detrimental to the short-term and long-term success of the business. Finding ways to resolve the conflict amicably is important, but it is best whenever possible to avoid a situation where a disagreement could arise in the first place.
Business Law firm Brown & Charbonneau, LLP can help you to try to minimize the chances of a partnership dispute through the use of effective contracts such as partnership agreements and employment agreements.
Unfortunately, there are situations when disputes do happen… sometimes even under the best of circumstances. Brown & Charbonneau, LLP can offer help when a problem arises, and can also assist you in identifying the top common causes of partnership disputes so you can do whatever is possible to avoid these sources of conflict.
Top Causes of Partnership Disputes
Partnership disputes can arise for many reasons as two partners own a business together and work together. However, some of the most common causes of partnership disputes include:
- A breach of fiduciary duty: Partners have a duty to act in the best interests of the business. They should not misappropriate company funds, they should not take business that ought to belong to the company to benefit them personally, and they should not otherwise do anything that would harm the interests of the partnership. If a partner acts inappropriately and hurts the business, this is a serious dispute that can sometimes result in litigation and that could sometimes set the stage for the end of the partnership.
- Disputes over how resources should be used. Often, there is conflict regarding whether financial resources should be used for a specific purpose such as buying new equipment. Hopefully, a partnership agreement details who will have authority over the particular decision or what process should be used to make the decision. However, if authority is not clearly delegated and partners have to decide together, it could be difficult to resolve the conflict when they hold opposing positions on the issue of resource allocation.
- A failure to delineate authority: If there is not a clear separation of responsibility among the partners, it is inevitable that conflict will arise frequently as both partners try to work on overlapping issues. Using partnership and employment agreements, all partners should make certain that they understand both their rights and their obligations within company operations.
- A failure to fairly distribute work loads. In some partnerships, only some of the partners work and others just provide the funds and are considered silent partners who made only a financial investment. In other situations, partners will divide up work that needs to be done and will all be involved in operating the business. Unfortunately, if any of the partners believe that the workload is not being distributed fairly when they are operating a business together, this can result in conflict arising.
These are just some of the many causes of partnership disputes that can arise among people who have formed a partnership and who are trying to do business together. Brown & Charbonneau, LLP can help you to find ways to avoid conflicts from occurring that hurt your business.
What Should You Do When a Partnership Dispute Arises
If a partnership dispute arises, you should contact an experienced business attorney as soon as possible. Your attorney can help you to identify whether there are any documents that you have created which should delegate authority or otherwise provide the blueprints for resolving the dispute. An experienced attorney can also assist you in identifying different methods of dispute resolution when a partnership dispute arises, such as mediation or arbitration.
Whatever the specifics of your disagreement or your plans for resolving them, Brown & Charbonneau, LLP is here to provide you with assistance. We can advocate for you, represent you in court proceedings, and otherwise work to help ensure that you are treated fairly by your partners.
Getting Help from an Orange County Partnership Disputes Lawyer
Brown & Charbonneau, LLP knows the ins-and-outs of partnership formation and can provide detailed legal advice when it comes to structuring your partnership. Our legal team also understands the appropriate methods of responding to partnership disagreements in an effective way to preserve important business relationships.
To find out more about how an Orange County partnership disputes lawyer can provide assistance, give us a call at give us a call at 714-5053000 or contact us online to find out about the ways in which our legal team can help.