When to Seek Legal Help for a Partnership Dispute

Although most people do not enter business partnerships with the expectation of a dispute, partnership disputes are an inevitable part of doing business. However, if you and your partner can’t agree on how to run the company or resolve a dispute without going to court, it is time to seek legal help.

The Dispute Is Unavoidable

As business owners build a successful company, disagreements will inevitably arise. These conflicts can often destroy a business and its potential for success.

It is always better to resolve issues promptly before they become legal problems. However, this is only sometimes possible.

The Dispute Is Impossible to Resolve On Your Own

When partners disagree, resolving the dispute without legal action is sometimes possible. This can be especially true when a dispute arises because of a misunderstanding of a partnership agreement.

When a partnership dispute is resolved through alternative means, such as mediation or arbitration, the parties can avoid the expense of litigation and move forward with their business.

However, a partnership disagreement is sometimes impossible to resolve on your own. When a partner uses company funds or assets for personal purposes or when a partner engages in illegal activity, it is often impossible to resolve the dispute without a help of a business disputes lawyer.

When a partnership is experiencing significant difficulties, consider an ‘early neutral intervention,’ where an independent party intervenes to help solve the issue. This can involve the practice manager, or a partner lawyer, acting as an intermediary who helps facilitate open communication and understand the concerns of the affected partner.

The Dispute Is Endangering Your Business

If you’re a business owner, nothing can be more critical to your success than your relationship with your partners. A strong partnership can significantly impact your growth, creativity, and innovation.

However, disagreements with partners can sometimes lead to serious conflict that risks your company’s future. When this happens, seeking legal help from an experienced lawyer is vital.

Disputes between business partners can stem from several factors, such as a breach of fiduciary duties, failure to allocate resources adequately, and fraud. If one or more of these scenarios occurs, you must consult an attorney to determine whether you can file a lawsuit and analyze your potential claims.

The Dispute Is Resulting in a Loss of Profits

There are several reasons why a business dispute could occur. Disagreements over management decisions, issues with ownership rights, and a change in the market can all be sources of conflict.

Ideally, partners will agree to the terms of their partnership agreements and work together to resolve these conflicts promptly. However, that is only sometimes the case.

If a partner fails to fulfill their obligations in the agreement, they are breaking the contract and can be sued for breach of contract.

In addition, if a partner misappropriates funds or assets from the company, they are breaching their fiduciary duty. This may result in significant financial loss to the company.

The Dispute Is Resulting in Damages

A partner with a conflict of interest can cause many problems for the business. They may use the company credit card to pay for personal expenses or take business equipment or products without accounting. This can drain the company’s cash flow and reduce its profits. Getting legal help as soon as possible is essential if this happens to you.

Communication breakdowns are also a significant factor in partnership disputes. The best partnerships operate when the partners are open and honest about their financial needs and goals so that they can work together toward mutually beneficial outcomes. If you’re experiencing a partnership dispute, talk to an experienced lawyer about your options. They can guide you on what to do next, so your business can thrive.