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A Well-Drafted Partnership Agreement Can Help You Avoid Disputes


No business owner wants to end up locked in a partnership dispute. While disagreements between partners are bound to happen, a lengthy dispute could cause serious damage to the business. A well-drafted partnership agreement can go a long way towards reducing the risk of conflict. Here, our Miami partnership disputes lawyers highlight three key issues that should be addressed in your written partnership agreement.

  1. Finances: Contributions, Ownership Stake, and Distribution Rights 

It is probably not surprising to learn that a significant percentage of partnership disputes are centered around money. Your written partnership agreement must address finances. Specifically, the agreement should clarify:

  • The initial and ongoing contributions of each partner;
  • The ownership stake of each partner; and
  • The distribution rights of all parties involved.

In other words, the partnership agreement should tell you exactly how much each person needs to put in the business, how much of the business they own, and when and how much they can take money out of the business. You can go a long way towards avoiding partnership disputes by getting all of the major financial questions sorted out in your partnership agreement. 

  1. Business Operation: Day-to-Day Decision Making Authority 

Owning, managing, and operating a business is complicated. Business partners do not always see eye-to-eye on how things should go or how the company should be run. Of course, there is not always a “right” answer to how things should operate on a day-to-day basis. That being said, there needs to be a way to sort things out and make decisions.

A written partnership agreement should provide instructions for day-to-day decision-making. You do not have to run into problems where you and your business partners are stuck in a deadlocked dispute, unable to make decisions. After all, many business issues are time-sensitive. A written partnership agreement that clarifies decision-making authority reduces the risk of disputes. 

  1. Conflict: A Clear Process for Dispute Resolution 

Finally, it is important to emphasize that no written agreement can ever completely eliminate the risk of disputes. Disagreements between business partners will happen—and sometimes these issues can be hotly debated. A well-drafted partnership agreement should always include a clear, carefully-designed process for dispute resolution.

You do not want a dispute with a business partner to drag on and cost you time, money, and business opportunities. Whether it is an informal negotiation, business mediation, or mandatory arbitration, the partnership agreement should state exactly what you need to do to resolve a difficult dispute.

Contact Our Florida Partnership Law Attorneys for a Confidential Consultation

At Pike & Lustig, LLP, we are a boutique law firm with a focus on business law and business litigation. Our attorneys see solutions where others see problems. If you want more information about partnership agreements and partnership disputes, we can help. Call us now for a confidential, no obligation review of your legal case. Our attorneys represent business owners and entrepreneurs in Miami-Dade County, Palm Beach County, and throughout the wider region in South Florida.

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