A Premier Legal Resource Since 1985

Partnership disputes: A threat to your business?

On Behalf of | Mar 26, 2018 | Business Litigation

You and your business partner work together on a wide range of matters in connection to your company. It is natural that you two might not be in total agreement about all aspects of your business. Sometimes, disagreements between business partners are relatively minor and are able to be resolved without much trouble. Other times though, they can grow into full-blown disputes.

Such disputes come in many varieties

Partnership disputes can be over many things. Examples include roles, responsibilities, money and a business’s operations. They can also vary greatly in their complexity and potential for contentiousness. When a dispute arises between you and a business partner, it could have the potential to affect many things for your company. It could possibly even impact your company’s likelihood of long-term survival.

Disputes among partners can be a potential business-killer

A major fear among many business owners is fear of their company failing. The sad reality is that there are a fair amount of companies that simply don’t make it in the long-run. Estimates have put the five-year survival rate of startups at around 50 percent.

A recent study came up with a list of the 20 top predictors of startup failure. Intra-team conflicts made this list. Conflicts between partners are included in this class of conflicts.

The study found that intra-team conflicts were cited as a reason for failure by around 13 percent of failed businesses. This put such conflicts in the No. 12 spot on the business failure factor list.

The options for addressing partnership disputes

So, simply ignoring partnership disputes can be very risky. So too can not giving careful consideration to how to respond when disputes arise. There are many potential ways such disputes could be addressed and resolved. While litigation may sometimes be necessary, there are a lot of options out there for resolving such disputes outside of a courtroom. These include informal negotiations, mediation, arbitration and other forms of alternative dispute resolution. When considering what route to go, it can be important to give careful thought to which would be most appropriate for the situation and which would be most likely to help with your goals for your company, including goals related to your business’s long-term survival. Business owners can seek out legal guidance on this front.