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5 Common Causes of Partner Disputes and How to Resolve Them

LS Carlson Law April 10th, 2023

As a business owner, you may find that disputes can arise between partners, even if you have a strong partnership agreement in place. Disagreements can arise from various reasons such as money, management decisions, or communication issues. These disputes can be stressful, time-consuming, and costly. In this blog post, we will discuss the 5 common causes of partner disputes and how to resolve them.

Financial Disputes

Money is a common cause of disputes between partners, and can lead to business litigation. Disagreements can arise over issues such as how profits are divided, how much each partner should be paid, and how much money should be invested back into the business. To prevent financial disputes from arising and potentially leading to business litigation, it is crucial to have a clear and detailed partnership agreement that outlines the financial responsibilities and obligations of each partner.

Management Decisions

When partners disagree on how the business should be managed, it can lead to disputes that may require court intervention (read – business litigation). This can include decisions such as the direction the business should take, hiring decisions, and marketing strategies. To prevent management disputes from arising, it is essential to have clear roles and responsibilities outlined in the partnership agreement. Regular communication between partners is also essential to ensure that everyone is on the same page.

Communication Issues

As mentioned above, communication is a critical element of any successful partnership. However, communication issues can arise, leading to misunderstandings and disputes. To prevent communication issues, partners should establish clear lines of communication and have regular meetings to discuss the business's progress and any issues that may arise. Many of LS Carlson Law’s clients have utilized partnership check-ins that are hardwired into the company calendar. And, these standing meetings have been a game changer to many of our corporate clients.

Personal Differences

Personal differences can also lead to disputes between partners. This can include differences in personality, work ethic, and management style. To prevent personal differences from becoming a problem, it is essential to establish a culture of mutual respect and trust. Regular team-building activities can also help to foster a positive work environment.

Disagreements Over the Partnership Agreement

Sometimes, disputes can arise over the partnership agreement itself. This can include disputes over the division of profits, the length of the partnership, or the terms of termination, which may, unfortunately, require business litigation to resolve. To prevent these disputes from arising, it is essential to have a clear and detailed partnership agreement that all partners understand well and can access immediately.

If you are facing a partner dispute, it is important to seek the help of an experienced business litigation attorney. At LS Carlson Law, our team of skilled attorneys has extensive experience representing businesses in various partnership disputes. We can help you navigate the legal process and work to find a resolution that protects your business's interests. Contact us today to schedule a consultation and learn how we can help you resolve your partner dispute.

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