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Can I resolve a partner dispute without litigation?

On Behalf of | Oct 10, 2022 | Business Litigation

Businesses are operated by humans, and disputes will occur as interpersonal relationships are complicated. When operations aren’t going well between you and your business partner in Texas, you may start thinking about legal action. Instead of going to court, think about these alternatives to resolving partnership disputes.

Think outside the box for solutions

If you and your business partners are arguing, the best solution may be to think about different solutions to avoid litigation. finding a creative solution is much less expensive than going to court, but simultaneously, you need to be aware that your business structure may not be the same. Consider other solutions like the following.

  • Mediation – A third-party mediator can help you and your business partner work through differences of opinion if you want to remain together. Objective mediators can help identify communication conflicts and provide a path to a stronger partnership.
  • Buy-out – If you and your partner truly realize you can no longer work together, consider a buyout. One of you will keep the business, while the other will start a new venture.
  • Sell to new owners- Sometimes, it becomes apparent that none of the partners want to remain in the business. In this case, amicably selling your business is the best option.
  • Freeze-out – If partners don’t have equal interests, you can freeze out minority owners by creating a new entity.

What if These Options Aren’t Good for Me?

You have several additional options for resolving disputes. Dissolution might be a good option if you can’t sell your business. Bankruptcy is another possibility, but before you go down this route, consider the consequences. The last-ditch effort is litigation. Sometimes circumstances such as fraud committed by your partner, or other illegal acts, could make litigation a reasonable option.

Before heading into any decision, discuss your options with other partners or other business associates. Your business isn’t necessarily finished if you must part ways with one or more partners. The important thing to remember is that you make the split correctly and in a manner that won’t hurt your reputation.