Cadden & Fuller LLP Cadden & Fuller LLP

A Client-Focused Approach to Business and Real Estate Law

2 signs that a business partnership is no longer working

On Behalf of | Jun 18, 2023 | Business Litigation |

Entering into a business partnership with a like-minded party can be exciting. And if you strike the right chord, you can grow your business to greater heights. But like any relationship, the honeymoon is bound to phase out, potentially leaving you to contend with the risk of partnership disputes.

Unfortunately, not everyone can endure the storms that come with partnership disputes. When partnership conflicts lead to irreconcilable differences, you may be left with no choice but to dissolve the partnership. How can you know it is time to end a business partnership? Every situation is different. Yet, these are two clear signs that time could be up as far as your business partnership is concerned.

Your partner is no longer responsible

When you were entering into a partnership, you most likely signed a partnership agreement that outlined each party’s duties and entitlements. If your partner has resorted to making risky and/or potentially reckless business and personal decisions, you’ll need to review your partnership agreement. For instance, a partner who has resorted to improper conduct with employees and clients or one who is addicted to drugs and gambling can pose serious risks to your partnership and business.

You are no longer pulling in the same direction

When you got into the partnership, you probably had the same goals for the business. And you worked together to realize these common goals. However, when your partner drifts away from the original business goals, then you are likely to run into costly disputes that can ruin your business. If your partner is no longer ascribing to the original goals, you should consider reviewing the terms of your partnership agreement to better understand your options.

Protecting your interests

Every business partnership comes with its share of challenges. Learning more about California business laws can help you protect your rights and interests in the event of a partnership dispute.