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5 Ways to Avoid and Resolve Partnership Disputes – Marcarian Law Firm

Updated: Dec 19, 2023


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Partnership disputes are not uncommon, even for the closest friends. Small disagreements can suddenly blow up into major disputes that leave the business’ future in doubt.

Fortunately, business disputes can be avoided and resolved. However, it will take some wise thinking, maturity, and potentially some investment of money and time.

There are several resolution options available for those who get into partnership disputes:


1. Written Agreement

One of the first things you should do when you decide to launch a partnership with someone is to establish a written agreement. It might be in the form of a partnership agreement or an operating agreement, but in either case, it will put into writing the terms of your partnership.


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The agreement should include at least:


  • The role of each partner

  • The amount of control of each partner

  • Each partner’s duties and obligations

  • Details about capital contributions

  • How additional capital will be handled

  • Compensation and distributions

  • The decision-making procedures of the business

Your written agreement should be detailed to avoid anything that is not clear leading to a dispute in the future. It is impossible to plan for every scenario, but the more you have planned the better. In some cases addressing these issues can be uncomfortable, but doing so will help you avoid an even more uncomfortable scenario down the road.


2. Discuss the Partnership Agreement and Other Issues with an Attorney

You can develop your own written agreement without anyone else’s assistance when launching a business if you so choose, but it is always best to have an Aggressive Pharmacy Attorney review it before it is finalized. Every business is different and it is always smart to have a professional guide you right from the very beginning.


3. Deal with Disputes in an Efficient Manner

Should a dispute arise as it often does in business, it is important to set aside time to discuss the issue in a solutions-oriented productive manner. The earlier you can resolve problems the better off you are and the more likely you are to avoid the issue escalating. Set aside any desire you have to win a disagreement and focus on the outcome you both want to achieve.

Business partners both have the same goal – to operate a successful business. It’s the process of doing this that usually causes disputes, but if you keep in mind you are both focused on the same outcome ultimately, it can make compromise easier.


4. Contact a Mediator

Should a dispute not be resolved with our efforts alone, it is best to reach out to a third-party neutral who can help you with more productive efforts. It does not mean that either side is relenting, but instead, that you need assistance negotiating the best possible outcome. Working with a mediator at this point prevents a partnership dispute from becoming expensive, time-consuming, and damaging to your business.


5. Consult an Attorney

If mediation fails, you will be forced to contact an Employment Law Attorney. Doing so sooner rather than later ensures your interests are protected and you can move forward as quickly as possible.


Contact a Business Partnership Dispute Attorney in Los Angeles



If you would like information about resolving partnership disputes, contact Marcarian Law Firm. Contact us today to schedule a free consultation.


FAQ

How do resolve business and partnership disputes?

Partnership or shareholder disputes can often result in lost profits or the destruction of the business itself. However, careful planning and skillful conflict resolution can help prevent disastrous outcomes. Whether you are forming a new partnership, LLC, or corporation or facing a dispute with your business partners, it is wise and cost-effective to engage a skillful attorney as early in the process as possible.

What are some of the most common sources of partnership disputes?

These including:
  • Inadequate or vague partnership agreements

  • Misconduct by one partner

  • Disagreements about what to do when the business thrives or struggles

What are the different methods of dispute resolution in partnership or business disputes? Partnership or business disputes may be dealt with through various methods of dispute resolution, including:

  • Negotiation

  • Mediation

  • Arbitration

  • Litigation


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