Partnership disputes are not uncommon in small businesses. Multiple partners can create conflict at times. Navigating the interpersonal and legal implications of those disputes can be difficult without experienced legal counsel by your side.
At the Saxton Law Firm, we help Missouri small business owners resolve partnership disputes and create strategies to prevent them in the first place. Our team are skilled negotiators that attempt to resolve problems, and are experienced litigators for if that becomes necessary. Schedule your consolation today to learn how we can help.
Common Disputes Among Business Owners
Business owners and partners face challenges and stress from running the business. Common conflicts that may arise include, but are not limited to:
- Breach of Fiduciary Duties: These occur when one owner accuses another of violating their fiduciary obligations to other owners or the business.
- Breach of Contract or Partnership Agreement: The partnership agreement or another contract sets forth specific terms and obligations. If one party breaches those terms, a dispute may arise.
- Compensation Claims: Partners are often entitled to a specific share of the profits, losses, and other aspects of compensation. Disputes are common when discussing the topic of someone’s pay.
- Business Direction Disagreements: Some disputes focus more on where the partners want the business to go, rather than a specific legal dispute. This can cause significant conflict and harm the business.
- Misappropriating Funds: If one partner is stealing money or improperly using business finances, this is a serious infraction that requires a careful approach.
These disputes and many others may be solved with the help of an experienced small business owner attorney in Missouri.
Options for Resolving Partnership Disputes
There are several ways your small business attorney can help you resolve partnership disputes. These options may include:
Negotiating a Resolution
A skilled negotiator can work with your partner or their attorney to solve the problem. Direct talks and open communication can help remove some of the emotion and find a mutually agreeable solution to the problem. Many negotiations resolve the problem before it becomes costly or problematic for your small business.
Mediation or Arbitration
Mediation utilizes a neutral third party who helps guide the discussion and seek a resolution. This form of alternative dispute resolution is often effective in exploring what the problem is and the multiple options available to solve it.
Arbitration is another form of alternative dispute resolution where an arbitrator hears evidence and makes a binding decision that helps to resolve the dispute. Arbitration can be significantly cheaper than other forms of litigation, but offers less flexibility than negotiation or mediation.
Reviewing a Partnership Agreement and Considering a Buyout
Many disputes arise from disagreements about the partnership agreement. One owner may misunderstand the legal terms contained in that agreement. After a review and analysis by the attorneys, this may help resolve the issue. In other cases, the agreement may be ambiguous, especially if it was drafted between the parties without experienced legal counsel to help.
In cases where there is an impasse or inability to work together, a buyout may help resolve the problem. A partnership agreement should set forth how this process works, but your attorney can help facilitate this transaction to resolve the problem.
Litigation
At times, the only way to solve the problem is to litigate. This means filing a court action that holds the other partner responsible for their actions or inactions. Litigation can be time-consuming and difficult, but is much more effective with an experienced small business litigator by your side.
READ MORE: Legal Advice for Small Businesses in Kansas City
At Saxton Law Firm, our small business attorneys can help you resolve partnership disputes. We have the experience necessary to limit the stress and financial hardship these disputes may cause. Contact Saxton Law Firm for a FREE case review!