One option you have as a business owner is to form a partnership. This means that you bring someone on board to share financial responsibilities and the day-to-day tasks of running operations.
That being said, relations between partners can become tense at times. Disputes can arise and if they are not resolved, they can create real problems. Outlined below are some of the most common causes of disputes between business partners.
Different goals
Business partners should have different strengths and weaknesses so that they complement one another. However, their core goals and values should be similar. For example, if one partner is only in it for the short term, but the other sees the venture as a long-term project, this can create disagreements. Both partners need to make sure they are on the same page in terms of core objectives before signing a partnership agreement.
Unfair workloads
The workloads of business partners should be distributed fairly. While one partner may take a more hands-on approach, this should be agreed upon before a formal agreement is signed. If a partner feels like they are taking on an unfair share of the workload, they can soon become unsettled.
Breach of duties
Business partners have a fiduciary duty. This means that they must act in the best interests of the company. Partners should not take unnecessary risks that place the company in jeopardy. They also should not siphon money from the company for personal profit. Breaches of fiduciary duties are among the most common causes of partnership disputes.
Negotiations between partners can be formalized in a partnership agreement. If you need help drafting a partnership agreement or resolving a dispute, contact our law firm today.
