Options for Resolving a Partnership Dispute

Options for Resolving a Partnership Dispute

Posted by The Sterling Law Group on July 8th - Business Law

Partnership disputes can be thorny matters because of the stakes involved. If business partners have a dispute that falls short of litigation, seeking advice from a Roseville business attorney can help mediate the situation.

Partnership disputes present an obvious risk for a business that cannot continue to operate if its owners are at odds with each other. Arguments and disagreement can be a big business expense. While litigation is an obvious option, that should be the last resort. There are some ways to resolve these disputes without a costly court battle, and you should discuss these with a lawyer who is well versed in business law.

Mediation

This is one of the best possible ways to talk out differences between the partners and potentially avoid business litigation. The important thing is that they are talking with the goal of ironing out their differences. This is where partners should begin. The hope is that this step can produce an agreement or resolution.

Buyout

Sometimes, partners can no longer exist together. Whether it is personal or business differences, some arrangements are bound to come to an end. A buyout allows the business to keep operating. The challenge is deciding who buys out who and the terms of the transaction.

Selling the Business

Whether the partners cannot agree on which one should take over or whether they are simply done with the matter, selling the business is a possible resolution. This has advantages when partners want to move on to do something else, and it can maximize each of their financial interests in the business.

Freeze-Out Mergers

Not all partners are equal within a partnership. Some may have more clout and larger ownership interests than others. This translates to an ability to cut the other partners out of the picture. Majority owners could engineer a merger with a bigger company that would freeze the other partners out of the picture.

Dissolution

Some partnership disputes are intractable, and they cannot be resolved no matter what. Sometimes, the partners agree to go their own way and dissolve their business. In other cases, the court does it for them after one or more partners files a lawsuit. It is better for the partners to keep control over the dissolution process and not cede it to the court. 

Litigation

Some partnership disputes result from misconduct by one or more of the partners. The others have no choice but to sue because they believe that other partners either breached the partnership agreement or their fiduciary duties. While this option should be avoided at all costs, lawsuits happen. As a partner, you are financially and directly affected by what the other partners do. If they have done something wrong that impacts you, a lawsuit may be your best bet.

Experienced Roseville Business Lawyers

Either way, you should have a lawyer when you are involved in a partnership dispute. When you are a partner, you could be liable for what someone else does. Your assets and livelihood can also be affected. Call the lawyers at The Sterling Law Group at (916) 790-0852, or contact us online to discuss your legal options and the best way to resolve your issues.

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