One of the most common types of business structure is a partnership. It’s a simple structure where two or more people come together to start a business. But just like most relationships, conflicts can arise in a business partnership. Parties can argue on various matters such as authority, finances, the company’s vision, and business goals. When it gets to this point, the best solution is to hire a corporate lawyer to help resolve the issue. Take a look at these common disputes that an attorney can help you with.
Disputes About Running the Business
As the business grows, disagreements will arise about how to run the business or conduct certain operations. For instance, partners can disagree on how to:
- Use the company’s profits
- Use the resources
- Which opportunities to take, and
- Who has the authority to make certain decisions
If you had drafted a partnership agreement, you could avoid such disputes. However, not all business partners draw an agreement initially, resulting in conflict. In such a case, reach out to a lawyer to help you resolve the conflict with your partner. This can involve a lot of negotiating and drawing up an agreement that covers important aspects of the business.
Misusing Company Assets
Certain partners have trouble separating their funds and assets from the business. For instance, one partner can use the company’s credit card to pay personal bills in a restaurant or car loan payments. Another one can use company equipment such as the office car for personal errands. Such actions can easily drain the company’s cash flow and result in partnership conflict. If your partner is taking advantage of company resources, you can consult with experts like Lulich & Attorneys corporation lawyers. An experienced attorney will help you understand your options and how to reach a solution.
Breach of Contract
Partners need to sign a contract that governs their behavior in regard to the business. For instance, they can have a non-disclosure agreement that prevents either partner from sharing confidential information. Other common agreements between partners include non-compete agreements and partnership agreements. If a partner violates the terms of these agreements, the other partner can hire an attorney and pursue legal action. Depending on the terms of the contract, the attorney will help resolve the conflict.
Wrong Conduct by a Partner
Usually, what one does outside work is their business. But if that behavior has the potential to damage the company, then as a partner, you should be concerned. For instance, if a partner commits a crime such as fraud, it can damage the company’s reputation. If you’re worried that your partner’s conduct can affect you in the future or has started affecting the business, talk to a business attorney. They will guide you on the steps to take to protect the company.
Dissolving a Partnership
There are many things that can lead to a partnership failure. In fact, all the reasons mentioned above are enough to lead to dissolution. In other cases, a partner may wish to step back or retire. Also, if the partnership had an expiry date, then the partnership could be dissolved once that term expires. No matter the reason for breaking the partnership, disputes such as how to divide the assets and whether other partners can buy out the withdrawing partner can arise. Things could get messy if there wasn’t an agreement outlining how to handle these issues. In such a situation, talk to an experienced business attorney. They will represent your interests and advise you on the steps to take.
Partnerships aren’t always a smooth ride. Challenges will arise to the point of threatening a business. If you and your partner are involved in disputes, let a business lawyer help you solve them.