When a partnership dispute arises, it can be difficult to determine what to do next. You know that you need to take action for the sake of the business, but you also know that the wrong move could make matters worse or prolong a resolution.
Here are 7 steps to take in the event of a partnership dispute:
1. Run The Business
A dispute at the top can have a domino effect on the whole business. Do not let the dispute take your focus away from the day-to-day tasks necessary to keep your business moving forward.
2. Identify The Source Of The Partnership Dispute
On the surface, the source of a dispute may seem obvious. Perhaps you believe your partner is not fulfilling his or her duties, or you have been accused of not fulfilling yours. Perhaps there is a disagreement over the compensation system or a specific opportunity. It can be worthwhile to look below the surface to find out what is at the core of the dispute. Do you and your partner share the same goals and vision for the business? Are your roles adequately defined?
3. Review The Partnership Agreement
Take a look at the partnership agreement and any other relevant documents. Are your partner's actions in violation of the agreement? Are yours? Was the issue overlooked in the creation of the agreement and can it be added in now? The partnership agreement may even specify a means for resolving disputes.
4. Identify Any Other Impacted Parties
The partners may not be the only parties impacted by a dispute. Keep in mind employees, investors, lenders, suppliers and customers who may have a stake.
5. Make Sure You Have Fulfilled Your Responsibilities
Disputes between partners can become intense and emotional. Be aware that if you make accusations against your partner, your partner may very well make accusations against you. Make sure you have not given your partner any ammunition by leaving your duties unfulfilled.
6. Talk To Your Partner
Have you discussed the matter with your partner? Is it possible that there has been a misunderstanding? Could this be resolved with a conversation?
7. Consider The Full Range Of Options
Do not go straight into battle mode. Yes, litigation may resolve the dispute, but perhaps something as simple as redefining each partner's duties might also resolve it. Negotiation can be a powerful tool. No matter what option you select, it is important to weigh the rewards against the risks. Do you want to take partnership-ending action when there is still value in the partnership?
Know That A Lawyer Can Help
An experienced business lawyer can provide guidance at any stage of this process, from helping you ascertain the nature of the partnership dispute to reviewing your partnership agreement to sitting down with you and your partner in an attempt to talk it through and negotiate a resolution. At Nialis Law Group, APLC, we have more than 35 years of experience helping businesses resolve internal disputes and move forward. We come to these matters with a reputation for success and a solid trial record.