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Can Partnership Disputes Be Avoided?

Posted on in Business law

San Francisco Bay Area business partnership dispute attorneyEven some of the biggest and most successful companies have faced their share of internal struggles and disputes among those who were there from the beginning. Some are able to overcome their disputes after a period of disagreement, while other partnerships dissolve under the pressure of internal conflict. However, with good planning, businesses can put a system in place to manage partnership disputes before they become an issue. 

Steps For Avoiding or Resolving Partnership Disputes

Even businesses that operate smoothly for years can suddenly face turmoil when issues of disagreement among the principals threaten to tear down everything they have worked so hard to create. Here are a few ideas to consider when starting a business that may help you avoid or overcome times of disruption:

  • Draft and finalize an operating agreement that is signed by all involved parties. It is fine to get started without an agreement, but this should be a priority before partners begin making sacrifices on behalf of the business.
  • Consider and address “worst case” scenarios when pulling together any business agreement.
  • Do not be afraid to walk away if you are unable to secure an agreement that meets your needs.
  • Vet potential partners to ensure their business ethics agree with the way you wish to conduct business.
  • Find partners with skills that complement your skill set. Avoiding redundancies in areas of expertise can help you avoid conflicts.
  • Build a contract that values equality among partners.
  • When working to resolve a dispute, focus on a solution rather than rehashing the issue.
  • Most experts agree that, in addition to corporate counsel, it is a good idea for partners to retain individual counsel when disputes must be resolved.

Whether philosophical, strategic, or economic in nature, operational disagreements - even those kept within the confines of the boardroom - have a way of negatively impacting productivity at all levels of a business. Once a dispute becomes public, it can undermine a company’s reputation among clients and the competition. If disputes cannot be avoided, a quick resolution is the best solution.

Settle Internal Disputes with an Experienced Silicon Valley Business Lawyer

Even minor disputes among partners can result in wasted time and misallocated assets that might be better used for more business-critical activities. To ensure that disagreements among partners do not negatively impact day to day operations, consult with a knowledgeable and resourceful California business law attorney. SAC Attorneys LLP offers the legal advice and knowledge of relevant precedent to help your company resolve most business-related disputes. Call a San Jose business dispute resolution attorney at 408-436-0789 and set up a time for an initial consultation to discuss possible solutions to your case.

Sources:

https://www.forbes.com/sites/shanerobinson/2014/02/20/how-to-avoid-a-partnership-dispute/#1ab2271b56de

https://www.legal.io/guide/551c5f627777773fa2950100/5-Ways-To-Avoid-And-Resolve-Partnership-Disputes

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