How to Avoid a Business Dispute With a Partner

A partnership can increase the value of your business through capital, skill, and collaboration. However, like any other relationship, a partnership requires commitment and effective communication to achieve the set goals. Unfortunately, whenever people work together, disagreements are inevitable.

In a partnership, disagreements can devolve into conflict that can undermine the strength of the business. In some cases, it could lead to partnership dissolution. It is critical to provide a framework for resolving partner disputes when two or more co-owners find themselves in disagreement.

In this blog post, we discuss just a handful of ways that you can avoid business disputes.

Create an Operating Agreement

If you are entering into a partnership, you should create a written operating agreement. Even close family members or best friends can disagree when it comes to making tough business decisions. An operating agreement can help limit such disputes and provide a plan for resolving them when they arise.

The operating agreement should dictate the specific roles of each partner, mode of compensation, and methods of dissolving the partnership if needed. The guidelines on the agreement can help keep you, the business, and the other partners on track. An effective partnership agreement should clearly define the roles of each partner and aspects like allocation of profit or loss, legal issues, and termination of the partnership.

There are many online forms that you can use to create an operating agreement, but there is rarely a one size fits all approach to business. If you are entering into a partnership or have questions about an existing operating agreement, an experienced Ellis County business attorney can help.

Remain Professional, Even When You Disagree

Professionalism is an essential aspect of the long-term success of a partnership. Your interactions with fellow partners, employees, and customers can help to ensure you meet the company’s goals and objectives.

If a dispute arises, remain objective and approach the issue with your partner shoulder to shoulder. After all, you both want the business to succeed! Professionalism, courtesy, and respectful communication in all matters will help you not only avoid fatal disputes, but also resolve them expeditiously. Focus on finding a solution rather than winning an argument over a problem.

Consider Alternative Dispute Resolution

If a partnership dispute cannot be resolved internally, consider hiring a mediator. A mediator is a neutral party who will listen to each partner’s concerns and help you find a mutually beneficial solution. Dispute resolution methods should be defined in the partnership agreement, so be sure to defer to your operating agreement.

Contact A Business Attorney

If you are concerned that a partnership dispute may arise without a chance for mutual resolution, you should contact a business lawyer who can help you explore your legal options for dissolution or a partnership buyout. An experienced lawyer can look at your partnership agreement, your operating agreement, and the specific facts of your dispute to help you determine what legal actions or conflict resolution methods should be pursued.

Book an Appointment with An Ellis County Business Attorney

At the Foster Massengill, PLLC, we will help you address partnership disputes proactively. Whether you need to draft an operating agreement for your partnership or need assistance in resolving a current conflict, we can help. Contact us today to speak with an Ellis County business law attorney today.