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A business partnership is an agreement made between two or more individuals where the responsibilities, profits and losses of a company are evenly shared. When business is running smoothly, usually, so are partnerships. Unfortunately, businesses have their ups and downs, and when this occurs, it can cause strain on these relations.
Disputes can arise from financial concerns, personal issues or a combination of the two, which can significantly hinder the functioning and success of a business. A business can experience either a loss of income, negative feedback, or an uncomfortable workplace environment if partnership disputes are left to escalate.
Occasionally, disputes may require the intervention of dispute lawyers, but there are ways to prevent this from happening. Listed are five steps adopted from lawyers that can help you minimise business partnership disputes.
1 - Consider writing a business partnership agreement
Like any formal contract, these agreements work best when all parties are aware of the rules and boundaries of the partnership. An outlined agreement explaining the ins and the outs can be a partnership saver. If you can, create this document at the beginning of the partnership or before tensions arise. Doing this ensures there is no miscommunication when determining the boundaries and responsibilities of each party, and it may provide answers in times of dispute.
The agreement should outline:
- The roles and responsibilities of each partner
- How the company should manage its finances
- Conflict and dispute resolution strategies
- A guide that explains the process if one or all members decide to dissolve the partnership.
2 - Identify the REAL issues behind the dispute
Business partnership disputes can be challenging to resolve if the real cause of the problem is unknown. One partner may be under the impression that they are doing most of the work, or managing all of the finances. Either way, to craft a solution, it is vital that both partners are honest and transparent.
3 - Defining outcomes – how does success look?
Not everyone can see eye-to-eye and business priorities and goals may differ between partners. Before sitting down with your partner, determine what outcome you ideally would like to see as a result of the situation.
Think about the big picture. Personally, what do you see your business looking like in the future? Where would you like it to end up? What standards do you want to uphold in achieving this result?
Understanding your business expectations makes it easier for you to recognise where your opinions may differ from your partner.
4 - Come together and agree
Once you have identified your outcomes and expectations, compare these with your partner’s and highlight any clashes. Try to remove any emotion from these discussions and point out realistic results from both opinions.
From this, you can ask questions such as:
- What is the ideal outcome each partner would like to see?
- What are some alternative outcomes?
- Is there a way to reach a compromise?
Taking part in such discussion sheds clarity on the real feelings and opinions of each partner and can outline the paths the business could follow.
5 - Seek professional help if needed
Unfortunately, some business partnership disputes can sometimes be too complicated to be resolved by themselves. If a situation does escalate, professional lawyers in negotiation can provide third party opinions and positions that may not be visible to the parties involved.
Business partnership dispute lawyers are also able to set out your rights and obligations which can help you avoid taking these issues to court.
Don’t have a partnership agreement? No problem - you have plenty of other options to follow when looking to resolve a business partnership dispute. Whatever challenge, advice or conflict you may be facing, Prominent Lawyers can help.
We can help evaluate your situation and let you know where you stand. Need to speak with a lawyer today about a dispute your business is facing? Call Prominent Lawyers today on 1800 77 66 46 or email us on info@prominentlawyers.com.au
