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Four Tips to Avoid Destructive Partnership Disputes


Creating a partnership can be a very successful way to build and grow a new business. Of course, as with any other type of business, there is always the risk that a dispute will arise. If allowed to persist, a small internal dispute can destroy a business. This is an especially worrying issue with partnerships.

Fortunately, this does not have to be the case. Partnership disagreements can generally be avoided or resolved before they actually turn into destructive disputes. In this post, our dedicated West Palm Beach business litigation attorneys provide four useful tips to help you and your partners avoid serious disputes.

  1. You Need a Well Drafted Partnership Agreement

Every partnership should be based on a carefully drafted written agreement. If you do not have a written partnership agreement already in place, it is crucial that you get one as soon as possible. Your partnership agreement should be drafted or reviewed by an experienced business law attorney. Among other things, this agreement should address:

  • The specific role of each partner;
  • The obligations and responsibilities of each partner;
  • The financial interests of all parties;
  • How business decisions will be made; and
  • How disagreements will be resolved.
  1. Discuss Expectations Ahead of Time

Business partners should be on the same page. It is important that each party understands the other’s expectations for the business. In many cases, partnership disputes arise because business partners are trying to move in opposing directions. Understanding your partner’s general expectations is one of the keys to a successful, low conflict business relationship. 

  1. Create a System to Resolve Disagreements

Within your partnership agreement, there should be a clear system for resolving disagreements.By creating this type of system ahead of time, it will be far easier to resolve problems when they arise. It is impossible to predict each and every future disagreement. By nature, unforeseeable circumstances will arise. That being said, with the proper system in place, business partners can often resolve disagreements before they become full blown disputes. Unfortunately, a heated dispute between the partners can damage or even destroy an otherwise successful business. 

  1. Put a Buyout Agreement in Place

As a general rule, partnerships should have a buyout agreement (buy-sell agreement) in place. This type of agreement is basically a last resort to ensure that a partnership dispute will not ruin the finances of the parties. There may be a time where it is prudent to end the partnership or to remove one of the partners from the business. By putting a well-designed buyout agreement in writing, you and your business partners will have a safety lever that can be pulled to get yourself out of a difficult position. Operating a partnership without a buyout agreement may expose you to avoidable financial liability.

Contact Our South Florida Partnership Dispute Lawyers Today

At Pike & Lustig, LLP, our commercial litigation attorneys have the skills and experience required to handle the full range of partnership disputes. To get immediate help with your partnership issue, please contact our law office today. We have locations in West Palm Beach, Wellington and Miami, and we handle business law cases throughout South Florida, including in Coral Gables, Miami Beach, Hialeah, Fort Lauderdale, Hollywood, Miramar, Pompano Beach, and Pembroke Pines.

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