Partnership disputes happen more often than you might think in small companies. Even though you are not a large corporation, it doesn’t make you immune to disputes. These often arise for various reasons and can turn into costly legal battles, especially if you aren’t prepared for these disputes. You cannot protect your business against all disputes, but you can be prepared for those that involve partnership agreements.
One of the most common types of partnership disputes involves authority. One partner might try to assert more authority over the other or over the employees, and this can lead to serious issues. A chain of command should be established within your company from day one to avoid this type of dispute.
Disputes between partners involving the finances of the company are also common. This type of dispute most often occurs when the company suffers financial distress or another form of financial crisis. These disputes are exacerbated when there is nothing written in the agreement about how the company will handle liabilities and profit-sharing.
The objectives of the company often lead to disputes between partners in small businesses. One partner might have clear goals and objectives for the company, while the other has entirely different views. A common cause of disputes from objectives is whether or not the company should expand its operations or move to a new location.
When a dispute arises with you and your partner, it’s important that you resolve the matter as soon as possible. Make sure your business law attorney is involved in the situation, so you can be advised as to the terms of the partnership agreement for your company.
