Common Partnership Disputes
If you are interested in becoming an entrepreneur, there may be some fear of the unknown. Starting a business is exciting but also scary, as there are many risks involved.
Having a partnership may make things easier. A partnership is a formal arrangement by two or more parties to run a business. The parties operate a business together and share the profits. You’ll have a buddy to bounce ideas off of, as well as an extra financial investment to help make your business the best it can be.
However, working with someone you are close to, like a friend or family member, can be a recipe for disaster. Even if your partner is not a close associate, they can still cause disputes. Bad behavior and disagreements about how to run the business can be a source of conflict.
What should you be on the lookout for if you consider a business partnership? Read on to learn about the most common disputes.
Disagreements About Expectations
Partners should be in agreement about the direction their business should take. Disputes arise when partners are not in agreement about the direction their joint business should take. For example, one partner may want to increase production while another may want to focus on quality. Partners need to have regular and open communication, particularly about goals and the direction of the company.
Just like in a marriage, a business partnership can also be prone to disagreements about money. There can be issues about salaries, how to divide profits, and how much money to reinvest into the business. Finances can put a lot of stress on a business partnership. To prevent this, the partners should meet up to create a financial plan and understand each other’s financial goals.
Communication is important in all relationships. Ineffective business communication can lead to lost opportunities and misunderstandings. Partners who work remotely can especially suffer. Partners can prevent this by having scheduled check-ins, rely on shared calendars and documents, and ensure both partners are aware of all decisions made in the business.
Ideally, both partners would be putting in the same amount of the work toward growing the business. However, this is not always the case. It’s common for one person to be shouldering the majority of the work. This can lead to frustration and resentment, which can lead to bad blood. To prevent this from happening, both partners need to clearly understand their roles and responsibilities.
Seek Legal Help
Business partnerships may start off great, but they can grow sour over time. One partner may engage in unscrupulous behavior that can threaten the business, and this can raise alarms with the other partner.
Have questions about your business? Fort Lauderdale business litigation lawyer Edward J. Jennings, P.A. can help you run your business efficiently and help you resolve issues with your partner. Call 954-764-4330 or fill out the online form to schedule a consultation.