Partnership disputes and why they happen

A partnership dispute can be incredibly detrimental to the future of your business. Even if you and your partner can move beyond it and keep working together, that relationship may be damaged. In many cases, disputes are so problematic that one person has to leave the company entirely.

Understanding how partnership disputes happen can help you guard against them.

Partnership disputes tend to develop along four specific lines

If you’re worried about this happening to your company, take a look at some of the reasons these disputes happen:

  • Disagreements regarding authority. You may both want to be in charge or one of you may feel like the other is taking steps without permission and without consulting the other first. Partners need to know exactly where they stand.
  • Disagreements about pay and compensation. These are very common in businesses where the partners do not have a set salary or have never made a written agreement regarding how much of the earnings they each are entitled to.
  • Issues with asset use. This is similar to the above but could go beyond pay. For instance, maybe your partner has been abusing the business credit card for personal purchases.
  • Disagreements about unequal workloads. Do you ever feel like you spend your entire life at the office, but your partner routinely clocks out early? When things do not feel fair and equal — especially when you do have equal ownership and equal pay for unequal work — disputes can begin.

These are just a few examples, but you can see how difficult a disagreement can be. Talking about the potential problems before they happen can help you and your partners steer clear of the most devastating complications.

If you do find yourself involved in a partnership dispute that’s turning litigious, however, you must act swiftly to protect your interests. Speak with an experienced attorney before you decide your next move.