People who go into business together often have a shared vision, but there are times when conflicts about how to make that vision a reality will occur. Those partnership disputes must be resolved quickly so the shared company doesn’t suffer irreparable harm.
There are many concerns that can lead to disputes. Some business partners may disagree about daily operations or management. Changes or misunderstandings about the future direction of the business can lead to conflict. Taking the time to review the dispute from a practical standpoint may benefit business partners and their business.
Causes of partnership disputes can vary greatly
Disputes may arise when partners have different expectations or fail to clearly define their roles and responsibilities from the outset. Other common causes include financial disagreements, unequal contributions of time or resources or perceived breaches of trust. As businesses grow and evolve, the initial terms of the partnership may no longer fit, which can lead to friction between partners.
Harmful effects of unresolved partnership disputes
Unresolved disputes can severely damage a business. They can disrupt daily operations and lower employee morale. It’s also possible that an on-going dispute may harm the company’s reputation. In some cases, disputes can lead to financial losses that eventually cause the business to have to close. Additionally, prolonged conflicts can distract from business goals, causing missed opportunities.
Options for resolving partnership disputes
The best way to resolve partnership disputes occurs when partners take the time to look at all possible resolutions for the matter and put the company’s interests first. These discussions should involve active listening, and they may involve having to call in outside assistance. Additionally, these conversations should ideally occur away from the business to keep matters confidential.
If direct negotiation fails, legal action may be necessary to settle disputes formally. At this juncture, it’s critical to have legal representation to protect both business and personal interests. Partnership disputes that go sour and remain unresolved can lead to dissolution of a partnership, either through a buyout by one partner or because the business is shuttered.