What is a Partnership Dispute?


If you were to analyze how businesses develop, then data would reflect that 50% of businesses change leadership before their third year of business, and four out of five CEOs are forced to step down from their posts. Going into a business with a partner can help businesses overcome obstacles in its initial stages, but if partners aren’t proactively resolving conflicts that arise, then disputes could ensue. 


The reasons for partnership disputes are plentiful and properly avoiding these conflicts could be the reason why your business survives and even thrives. A small investment of time and money into a business law professional could change the trajectory of your business. Visit our website to protect your business from partnership disputes. 

Common Partnership Disputes

Working with a partner can reduce your workload and improve a business’s efficiency and access to resources. However, creating new partnerships could lead to conflicts. Some of the major conflicts that partnerships face include buyout and retirement provisions, compensation amounts and systems of payment, and separations. 


Family businesses are prevalent in all corners of the world but could lead to nasty business disputes. Families carry their pre-existing relationships into business and incorporating money between family ties could create disputes. Families invest time and money, like any other business, but they also invest emotions and their familial hierarchies and culture into their business. If these arrangements aren’t contractually agreed upon by everyone, then the organization could flop. 


Disagreements on how to manage the business, misconduct, resource disputes, terms of the partnership agreements, and workload imbalance could lead to partnership disputes. If you’re involved in a dispute or have entered into a new partnership arrangement, then it could be in your business’s best interest to speak with a legal professional about how to protect your time, resources, family, and business interests. 

How to Avoid a Partner Dispute

One of the best strategies for resolving business disputes is by avoiding them altogether. Being proactive by properly documenting your business arrangements, creating clear guidelines and boundaries, working with like-minded individuals, and planning for the worse, while hoping for the best, could save your partnership. The following strategies can help you and your partners stay in alignment. 

Draft Documents With A Legal Professional

Written agreements between partners help everyone be in congruence because contracts can specify roles, responsibilities, obligations, duties, compensation, and expectations. Also, this protects the business in the case of a dispute because each partner will have an agreed-upon set of guidelines within which they can operate. 


Drafting legal documents may cost time and money but it wanes in comparison to sacrificing your intellectual property to others, wasting years of your life, and losing thousands of dollars. A legal professional will be able to help your business navigate partnership agreements and protect you and your partner’s interests as well as redlining contracts when there is a need.

Plan for Worse-Case Scenarios

Planning for a potential separation with your business partners could be fear-inducing but knowing that you’ll be protected in the case of a dispute could relieve tensions. Having a buy-out arrangement, and equity agreements can help protect your wallet in case you and your partners are unable to settle. Operating agreements help everyone to understand the enforceable guidelines of their partnership.

Agree to Disagree

It’s okay to agree to disagree in business and sometimes separations are what’s best for all of the partners. Walking away from a deal, partnership, or business sometimes is the only method to ensure your needs are met. Considering the needs of your business could require partners to move in opposing directions but save the future of the business.