Want to Avoid a Partnership Dispute? Here are Four Things You Need to Do
Though it is difficult to get reliable data, we know that a significant percentage of business partnerships end in divorce. A recent study found that as many as 70 percent of partnerships eventually fail. Knowing the challenges associated with owning and operating a business, it is imperative that you and your partners implement the right strategies to reduce your risk of a dispute. Here, our Miami partnership disputes attorneys highlight four things you need to do to protect yourself from partnership disputes.
- Draft a Written Partnership Agreement
A partnership agreement is a must. Without a written partnership agreement, the risk of a dispute rises dramatically. Even worse, it will be far more difficult to protect your legal rights and your business interests if you do not have an agreement. A properly drafted, comprehensive written partnership agreement will give your business the direction that it needs to succeed.
- Clarify Rights and Responsibilities of All Parties
You may be wondering: Why do so many business partners end up in conflict? One of the primary drivers of conflict among business partners is unclear roles. Business partners are not always on the same page regarding their rights and responsibilities. When negotiating and drafting a partnership agreement, it is crucial that you clarify the role of each business partner. Clear expectations will go a long way towards reducing the risk of a dispute that damages the relationship.
- Know the Importance of Conflict Resolution
Even if you have a well-drafted partnership agreement that clearly defines the rights and responsibilities of each party, you could still end up locked in a disagreement with a close business partner. The simple reality is that there is nothing that you can do to fully eliminate the risk of a disagreement. That being said, there are steps you can take that will help to stop a disagreement from devolving into a serious dispute that damages the business. There should be a pre-arranged process for conflict resolution within your partnership agreement.
- Consider Your Exit Strategy
Finally, you should also keep the exit strategy in mind when you enter a business partnership. What happens if one partner chooses to retire or otherwise leave the business? What happens if a partner suddenly becomes disabled or passes away. You do not want to be left scrambling, trying to find a solution. There should be a well-thought out process in plan to deal with business continuity, business succession, and business dissolution. Some additional planning on the front end can save you a lot of problems down the road.
Call Our Florida Partnership Attorney Today
At Pike & Lustig, LLP, our Florida business law attorneys are focused on finding solutions where others see problems. If you have any questions about partnership disputes, our law firm is available to help. Call us right away to set up a strictly confidential initial appointment. We handle partnership disputes throughout South Florida, including in Miami, Hialeah, Aventura, Hollywood, Fort Lauderdale, North Palm Beach, and West Palm Beach.