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Three Strategies to Reduce the Risk of a Partnership Dispute


A dispute between business partners can cause serious damage to a business. We know that getting locked in partnership litigation is the absolute last thing that most business owners and entrepreneurs want to deal with. While not every partnership dispute can be prevented, there are a number of different strategies that you can use to reduce the risk. Here, our Miami partnership dispute attorneys highlight three key steps to avoid partnership disputes in Florida.

  1. Draft a Comprehensive Partnership Agreement

When you form a partnership in Florida, there are some basic steps that you need to take. For example, certain registration documents must be filed with the Florida Division of Corporations. Beyond this, every partnership can benefit from a comprehensive, written partnership agreement. A professionally-drafted agreement will dramatically reduce the risk of a major dispute. A written agreement brings a significant amount of clarity to the business relationship. Among other things, a written partnership agreement should state:

  • The rights and responsibilities of each partner;
  • The capital/financial contributions of each partner; and
  • The decision-making authority of each partner.
  1. Be Proactive: Address a Disagreement Before it Becomes a Dispute

It is useful to distinguish a disagreement between business partners from a partnership dispute. Owning and operating a business is complex—especially in the current economic environment. Some disagreements between business partners are inevitable. It is crucial that disagreements are addressed at the earliest possible stage so that the matter can be resolved before it turns into a full-blown dispute. One of the common traits of the most destructive partnership disputes is that they frequently were allowed to linger for weeks, months, or even years before the problem was addressed. 

  1. Put Dispute Resolution Procedures in the Agreement—and Use Them

No written partnership agreement is perfect. While every partnership can benefit from a professionally-drafted agreement, there is still a possibility that a dispute will arise. To plan for this issue, a partnership agreement should include dispute resolution procedures. When a serious disagreement arises, it is useful to be able to refer to the pre-agreed upon dispute resolution protocols.

Additionally, business partners should make a good faith effort to abide by the dispute resolution procedures within the agreement. As an example, imagine that your partnership agreement calls upon the parties to enter business mediation if they are locked in a serious dispute. In that scenario, it is a best practice to make a genuine attempt to reach a resolution in mediation. Of course, your rights should never be allowed to take a backseat to your business partner. You may need to take more aggressive legal action to protect yourself and your business.

Contact Florida Partnership Dispute Lawyers Today

At Pike & Lustig, LLP, our Florida partnership attorneys are skilled, effective advocates for clients. We can help you take action to reduce the risk of partnership disputes. Call us now for a confidential consultation with a partnership lawyer. We handle partnership disputes throughout Southeastern Florida, including in Miami, West Palm Beach, Fort Lauderdale, Jupiter, Palm Beach Gardens, and Boca Raton.



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