Our Blog

Avoiding Business Partnership Disputes When Someone Stops Trying

Avoiding Business Partnership Disputes When Someone Stops Trying

Business partnerships are unique relationships akin to “marriages.” While your business partner may not necessarily be a family member or even a friend, you each owe a fiduciary or high-level duty to one another and spend a great many hours working closely together. In these close relationships, conflicts can and do happen, so what should you do if you suddenly find yourself with a business partner who isn’t pulling their weight?

First: Face-to-Face Negotiation

The first step to solving any problem is to get a clear understanding of what is really at issue. Sit down with your business partner and define the problem, and each of your respective viewpoints on how to solve it. Much of the time, simply talking about the dispute with your partner face-to-face can bring it to a close — it may just be a mutual misunderstanding.

Second: Mediation

If, after sitting down face-to-face, you still can’t work out the dispute between yourself and your partner, you may need to call in the help of a neutral third party professional to serve as a mediator. A third party mediator can bring perspective to both sides of the argument. Additionally, a good mediator can adjust the communication style to help translate your point of view or your partner’s, making it more easily understood by the other side. If need be, you can even agree to see a professional arbitrator to try to resolve the issue. The attorneys at the Capobianco Law Offices can assist you and your business partner in finding a qualified mediator or arbitrator.

Last Resort: Legal Action

Whenever dealing with a business dispute, legal action should be your last resort. Not only is it costly and time consuming but it can destroy any remaining goodwill between you and your partner. That said, if you have tried the other options, and you and your partner still cannot come to a resolution, you may need to consider filing a civil lawsuit. The issues in any civil suit may depend on your company’s formation documents, operating agreement, partnership or similar agreement. If you don’t have an agreement of that sort in place, your dispute will be governed by default laws in California. At the Capobianco Law Offices, we are experienced in small business litigation, and we can help you determine what type of lawsuit to file to best protect your business.

Best Course of Action: Prevent Disputes From Happening

If you ask any lawyer what is the best way to deal with business partner disputes, they will likely tell you that putting preventative procedures in place early in the lifecycle of a company is the most cost-effective and best way to keep the peace. The lawyers at the Capobianco Law Offices can help you draft founder’s agreements and formation documents that spell out the rules governing the business, ownership agreements that spell out percentages, conflict resolution policies to deal with deadlocks and disputes, and more.

Visit www.capobiancolaw.com today to schedule a consultation with an experienced business practitioner to prevent or solve your dispute and get your business back on track.

Leave a Reply

This site uses Akismet to reduce spam. Learn how your comment data is processed.