Partnerships are typically based on written contracts and agreements that spell out the terms of each partner’s role. However, disagreements are common. Sometimes they may involve claims of breach of fiduciary duty and require mediation or arbitration before they can go to full-scale commercial litigation.
It is crucial to resolve these disputes quickly to avoid business stops, loss of profits, or worse – the dissolution of the company. Here are some things to consider when choosing a partnership dispute attorney.
Experience
Only some partners expect to end up in a partnership dispute. However, conflicts can arise over a wide range of issues that may threaten the health and viability of your business.
Conflicts often revolve around financial matters. A partner may believe they are not getting their share of the profits or that the company needs to meet its financial goals. Discussing these matters openly with your partner and creating a financial plan that accounts for how profits will be split and how they will be reinvested into the business is critical.
A partnership dispute attorney can help you develop a sound strategy to avoid these types of disputes in the future. They can also help you understand the laws and rules governing partnership funds. In addition, an experienced lawyer can explain the fiduciary duties and responsibilities that partners must uphold when managing partnership funds. These duties can be based on an agreement or laws in your jurisdiction.
Reputation
A partnership dispute attorney with a good reputation can help you resolve your dispute outside of the courts. They can advise you of your options, such as mediation or arbitration, that can provide you with a resolution without needing a trial.
Disagreements between partners often stem from the inability to communicate effectively. It can lead to misunderstandings, heated arguments, and squandered opportunities. To avoid these disputes, all parties must communicate freely. It can be done by arranging meetings with few distractions, such as after hours or over dinner.
Even with the best business plan, partnerships are not immune to problems. In addition to disputes over fiduciary duties, other issues can arise that may require a partnership dispute lawyer, such as an unexpected change in one partner’s financial status, fraudulent conduct by a co-owner, or an offer by an outside party to purchase the company.
Fees
Partnership disputes can be costly for any business. Unless addressed quickly and effectively, they can lead to significant delays in operations, losses in profits, or even the complete dissolvement of the business.
A skilled partnership dispute attorney will help clients understand their legal rights and options. They will also help identify the critical issues in the case and explore potential resolutions that would benefit all parties involved.
In most cases, the parties can resolve the dispute through mediation or alternative dispute resolution. However, if this fails, an experienced partner dispute lawyer can represent the client in commercial litigation. It may include arbitration, which uses a neutral third party to facilitate discussion and agreement between the parties and results in a decision, or trial, which is more formal and results in a court-enforceable result. If a trial is needed, an experienced attorney can assist with drafting claims and defenses that will most likely succeed in court.
Reliability
Whether your business is structured as a general or limited partnership, a corporation, or an unincorporated joint venture, disputes can arise from miscommunications, allegations of partner misconduct, and breaches of obligations. The best option is to contact an experienced business partnership dispute attorney early on in the process to help you resolve the issue in a way that minimizes disruptions to your company and reduces legal costs.
Many partnership disputes involve claims of breach of fiduciary duty. It is when one or more partners violate their duties to the company by misappropriating funds, exposing the business to liability, engaging in fraud, or revealing confidential or proprietary information.
Some partners may think the only way to protect their interests is to file a lawsuit. However, litigation is expensive and can damage your business’s reputation and brand image. Alternative dispute resolution, such as mediation and arbitration, is often more cost-effective. They are also usually less adversarial and can result in a more favorable outcome for all parties.
