You may have entered your business partnership with the intent to do everything in the business as a team, but a disagreement can make it difficult to remain united. What are some common causes of disputes in business partnerships?
1. Financial disputes
Managing your business’s finances is key to your long-term success, but disagreements about those finances can lead to serious conflict between business partners. Even seemingly minor disagreements about managing the financial aspect of your daily operations could reach a breaking point if your business goes through a period of financial difficulty. In other cases, a partner may breach their fiduciary duty to the company through misappropriation of business funds or mixing business and personal funds.
2. Disagreements about each partner’s role and responsibilities
Establishing a business as a partnership allows you to benefit from both partners’ knowledge and skill. However, if one partner does not uphold their responsibilities, if partners’ work overlaps too much or if workloads are not distributed appropriately, the company may not run as smoothly.
3. Disputes over intellectual property
If your company actively builds its intellectual property, that intangible asset can be particularly valuable. Disagreements about who owns this intellectual property and how it should be managed can put that investment in jeopardy.
4. Different goals for the company’s future
If you and your partner do not agree on your vision for the company’s future then you may find it difficult to agree on more immediate matters.
What can business owners do when disputes arise?
While many disputes can be prevented through a careful and comprehensive partnership agreement, some disagreements may be inevitable. When these disputes arise, it may be helpful to discuss your options with an experienced attorney. Their guidance can provide insight into the terms of your partnership agreement and possible dispute resolution options.