Tips on Handling Partnership Disputes

Tips on Handling Partnership Disputes

October 7, 2020

Thinking about starting your own business with a friend? Have you already started one, only to find out that you don’t quite see eye to eye on major issues? The best way to solve (or avoid) partnership disputes in Miami, FL is to clearly define your partnership at the outset—and that requires help from an attorney.

Here’s how to handle or avoid partnership disputes in your business:

  • A written partnership agreement: Every business owned by two or more people needs a written partnership agreement. The format may change depending on your business structure, but the general idea is the same. You’ll need to define who the partners are, their roles, their shares in the company, how capital contributions will be handled and what they are, decision-making procedures, compensation and what to do when there is conflict, such as disputes, withdrawals and terminating the partnership. Doing this at the outset better ensures there won’t be any nasty surprises later.
  • Hiring legal counsel: As you know, precision and accuracy in business is the key to success, and legally-binding partnership or operating agreements is part of that. Hiring an attorney guarantees that you’ll have help customizing agreements to your specific business and individual needs. Don’t rely on form agreements, as they can include non-binding or non-applicable language, which will only cause more trouble later on down the road. Instead, take the opportunity to hire an attorney who can help you nail down a rock-solid agreement that covers all the major contingencies your business may encounter. You might never need it—but if you do, you’ll be glad you had an attorney help.
  • Focus on the solution: When you’re actually embroiled in a dispute, try to focus on potential solutions to the problem rather than the dispute itself. It’s easy to get caught up in arguing when emotions are running high, but it won’t benefit anyone. Instead, think about what’s best for the business, and refer to the partnership agreement if you continue to disagree about the next steps.
  • Don’t be afraid to hire a mediator: If your problems seem insurmountable, it might be time to hire a mediator. A mediator is a neutral third party who can listen to everyone’s concerns and help you come up with a mutually beneficial solution. Mediators are skilled at taking the emotion out of the dispute and focusing on what matters: a solution that has your company’s best interests at heart.
  • Consider dissolving the partnership: If no one can come to an agreement, it might be time to dissolve the partnership. In that case, it would behoove you to hire legal counsel to guide you through the process. They’ll be able to help you fulfill your duties and obligations while adjusting to the new circumstances as seamlessly as possible, which benefits everyone involved.

If you’re thinking about starting a partnership or terminating an existing business partnership due to disputes in Miami, FL, Ruben J. Padron, PA can help. Our firm handles a variety of corporate law issues—call today for a consultation.

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