Cadden & Fuller LLP Cadden & Fuller LLP

A Client-Focused Approach to Business and Real Estate Law

Common partnership disputes

On Behalf of | Feb 1, 2021 | Business Litigation |

Relationships ebb and flow through time, and those forged in business are no different. Even the most solid business partnerships may face challenges that call the future of the organization into question. 

Some disputes arise more often in a business partnership. Understanding them may aid in getting through them should they arise. 

Financial disagreements

The main goal of any business is to make money. Once that happens, some partners may start to disagree on what to do with profits. Financial discourse is one of the top reasons partnerships wind up ending. Business partners may start their relationship with an open mind and perspective on handling income and losses. However, as they begin to deal with the pressures and ups and downs of the company, their views may start to diverge. Things become especially damaging when one partner conceals information from the other. 

Contract disputes

Contracts are legally-binding agreements that form the basis of almost every facet of a business. Having a partnership agreement sets the terms for how individuals will work together to run the business. It is the framework under which the partnership exists and may address issues such as: 

  • Ownership share 
  • Decision making 
  • Splitting profits 
  • Partnership length 

If one partner begins to deviate from the terms of the partnership agreement, it may cause irreparable harm to the business. 

Business plan clashes

The vision for the business may evolve as it becomes profitable and times change. The plan created may need revisiting and revising. Partners with similar ideas when the business began may find themselves clashing over changes. Some of the most divisive issues revolve around expanding the business. 

A business partnership is subject to change through the years. Having an idea of some of the common speed bumps that may occur may help the business survive.