What Can I Do If My Business Partner and I Cannot Agree?
Disagreements between business partners can threaten a company's operations, finances, and future. Disputes may involve ownership rights, management decisions, financial obligations, or allegations that a partner has acted against the interests of the business.
Depending on the circumstances, legal options may include enforcing a partnership agreement, negotiating a resolution, pursuing litigation, or dissolving the business relationship. Lepera & Associates represents clients in partnership disputes and related business litigation.
Common Partnership Disputes
Disagreements Over Management and Control
Partners may disagree about business strategy, management authority, financial decisions, or their respective responsibilities. These conflicts can become particularly difficult when the governing agreement does not clearly resolve the disagreement.
Ownership and Financial Disputes
Conflicts may involve ownership percentages, profit distributions, financial contributions, access to business records, or the handling of partnership assets.
Alleged Misconduct by a Partner
Disputes may arise when one partner alleges that another has misused business funds, withheld information, engaged in self-dealing, or violated obligations owed to the partnership or other partners.
Partnership Dissolution
When partners can no longer work together, dissolution or another negotiated separation may become necessary. Resolving ownership interests, outstanding obligations, business assets, and continuing operations may require legal assistance.
Resolving Partnership Disputes
The appropriate approach depends on the partnership agreement, the parties' legal rights, and the nature of the disagreement.
Potential approaches include negotiation, mediation, litigation, or dissolution proceedings. Early evaluation of the governing documents and financial circumstances can help identify the available options.
Frequently Asked Questions
Can I force my business partner to leave the business?
Not necessarily. The available options depend on the business structure, governing agreements, and applicable law. Some agreements contain buyout or removal provisions, while other situations may require negotiation or legal proceedings.
What happens if we do not have a written partnership agreement?
A partnership dispute may still be governed by applicable California law and the parties' conduct or other agreements. The absence of a written agreement can make determining rights and responsibilities more complicated.
Can a partnership be dissolved if one partner objects?
In some circumstances, dissolution may be available despite a partner's objection. The legal requirements depend on the type of business entity, governing documents, and applicable law.
Discuss Your Partnership Dispute
If a disagreement with a business partner is affecting your business, understanding your rights and options is an important first step.
Contact Lepera & Associates to request a consultation regarding your partnership dispute.