Partnership disputes can often lead to business litigation. Partners can sometimes resolve these disputes on their own or through negotiation, but it doesn’t always work out. They still need a solution, and they need to know where to turn.
Exactly what this looks like will depend, in part, on the reason for that dispute. Below are a few common reasons to consider.
Financial disagreements
Financial issues are a big reason for disputes, and they can happen in a few different ways. For instance, there could be a dispute over how much money each person needs to invest in the business. They could also run into issues with how the business’s earnings should be divided or how money should be used. Do the partners split up all of the earnings, or should some of the money be invested back in the business?
Different goals
Business partners who have different goals or a different vision for the company may find themselves in conflict. Say that one person’s goal is simply to make as much money as possible, while the other person’s goal is to provide the best possible customer experience. One partner may feel like the other is constantly wasting money and making unnecessary investments, while the other feels that their partner is providing worse products or services in their efforts to make as much money as possible.
Power struggles
When it comes to making decisions, power struggles between business partners are common. They may both want to have the same roles and responsibilities. They may simply disagree on key decisions, such as the direction the business is heading. If two partners both own 50% of the business, they do have to compromise to make some of these decisions.
When disputes arise, those involved must understand all their legal options.