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Resolving partnership conflicts to protect business interests

On Behalf of | Jun 23, 2024 | Business Law

The right business partner can be a truly valuable asset for an entrepreneur. However, a partnership, like any other relationship, can cause certain challenges. Partners may find themselves disagreeing about how to properly run the company.

In some cases, those disagreements may become so intense that they threaten the culture at the company and the future of the organization. It is, therefore, necessary for those who have invested in a business and rely on it as a source of income to resolve conflicts with partners quickly and amicably, whenever possible and appropriate

How can business partners potentially overcome a conflict that could otherwise damage their organization?

With a contract review

Certain terms related to business operations may reflect details within the partnership agreement. Those starting a new business partnership often make every reasonable effort to address foreseeable challenges and disagreements in the contracts that they draft with one another. For example, the agreement might include a requirement to attend mediation together before litigating or may outline terms for one partner buying out the interest of the other. Going over business formation documents and the partnership agreement could help someone find a workable solution for a dispute with their partner.

With a careful analysis

Sometimes, partners feel strongly about doing business in a certain way because of personal preferences or outdated ideas that may not have any basis in how the company actually operates. It is sometimes possible to overcome a dispute by engaging in a thorough analysis and prevent providing a partner with information about how certain practices affect the company. Evidence of significant returns on specific advertising investments or even testimony from workers about different approaches to production at a facility could convince someone to more thoroughly consider the opinion of their partner.

With outside support

Mediation or possibly even arbitration can be useful tools for those dealing with a dispute involving a business partner. These alternative dispute resolution systems involve working with a neutral third-party professional to settle disagreements without causing additional damage to the partners’ relationship. Occasionally, if alternative dispute resolution is unsuccessful, it may be necessary to take the matter to civil court and ask a judge to weigh in on the matter.

Those facing a business-related conflict that could put their ownership interest or company at risk may need help addressing the situation. Exploring every option with the guidance of a skilled legal team can be helpful for those hoping to successfully navigate a dispute with their business partner(s).