Going into business with a partner can be a great way to maximize your efforts and success. Your strengths and weaknesses may complement your partners’, giving you the best of both worlds.

However, partnership disputes often arise, and it’s essential to know how to deal with them so you can get back to business. Here are five ways you can avoid or dissolve partnership disputes.

 

Ironclad Partnership Agreement

Before taking on any business partners, think about each person’s role and how compensation will work. Have an ironclad agreement written up by your attorney and have all parties sign it, so everyone is on the same page and there is nothing to argue about later. Some things to include in your contract are:

• Each partner’s role, duties, and responsibilities.
• How much capital each person will contribute.
• How much controlling interest each partner has in the company.
• How much compensation each person will receive and when.
• Decision-making procedures (how important will decisions be made).
• Craft a conflict resolution process to deal with partnership disputes, including how and when a business partner can dissolve the agreement, leave the partnership, or be forcibly removed.
• A process to add new partners and how they will be handled.

 

Prevention is the Best Way to Avoid Partnership Disputes

Be sure to hire a reputable attorney to draft your partnership agreement and review your contract’s fine print. The goal is to protect your interests in the company. Don’t overlook this critical step. You never know what the future will hold and while everyone is getting along is the ideal time to put in place protections for later.

 

Open Lines of Communication

If a conflict arises, make a habit that all business partners sit down and openly discuss the issue rather than immediately take legal action. It’s easy to let things fester, but when it comes to business, the best thing is to air the grievances openly and reach a comfortable agreement as quickly as possible. Focus on the problem and what is best for the business. Keep personal issues out of it.

 

Hire a Mediator

If the partnership dispute is a serious one that you cannot seem to resolve on your own with discussion, consider hiring a mediator or third party to hear both sides and help everyone come to an agreement. A mediator is skilled and impartial and can take confrontation out of the process. 

Consider dissolving the partnership if you still cannot come to an amicable agreement. 

 

Hire an Attorney

If things get really ugly, you may need to hire a lawyer to help you resolve the issues, uphold the original agreement, or force a partner out. Choose to speak to your lawyer earlier rather than later. Business attorneys are experienced and could help you find a solution before it’s too late. They will use their expertise to guide you toward the correct solution.

If you need help with a partnership dispute, contact Haber Law today.