When you enter business with a partner, you place an immense amount of faith in that partner to share your future goals, work amicably for the good of the business, and to resolve any issues with open communication and compromise. However, often, as partnerships continue over time, motivations and expectations may change. When conflict arises, it may be impossible to resolve the business dispute without some form of mediation or litigation.
The attorneys at Gaslowitz Frankel LLC are the premier fiduciary litigation attorneys for the state of Georgia, with 30 years of experience as leading professionals in the field. If you are a business partner in conflict with your partner, an experienced council can guide you through your options.
Four Common Causes of Business Disputes Between Partners
Some of the most common causes of partner disputes occur because partners have different ideas about what their business arrangement actually is, and the fiduciary duty all partners owe to each other partner.
The best way to avoid business disputes before they start is to plan ahead as if disputes are inevitable. A written partnership agreement is key, including a process to use to resolve disputes if they arise.
If pre-planning fails and there is a business dispute, it is often due to one or more of five reasons:
Finances
Financial stress is the most common reason businesses fall apart. Therefore, it follows that partners are likely to argue about finances – whether it be disputes about how funds should be allocated, whether reserve funds are to be maintained, or disputes about salaries.
If the business is performing poorly, this can add further stress to partner disputes. Even when businesses are performing well financially, differences in opinion about the financial direction of the business can cause irreconcilable rifts between partners. Financial disagreements often require mediation or litigation to solve these issues.
Authority and Decision Making
Many partnerships begin with all of the partners dividing responsibilities and decision making powers evenly. While this may sound fair and ideal, in practice, it may become impossible for partners to agree, leading to disputes and deadlock on who gets to make the ultimate decision.
Solutions include clearly allocating to different partners the authority to make decisions about different aspects of the business, and having a process for resolving disputes identified in the partnership agreement.
Business Direction
If partners develop different ideas about the direction of the business, this often leads to disputes. Common disputes between partners include decisions on spending, the allocation of profits, moving the location of the business, changing the product or services the business offers, merging with another business, or selling the business.
If you are unable to create a cohesive vision for your business with your partners due to conflict, litigation may be necessary to resolve these issues. As a last resort, the business can be dissolved if there is a deadlock and no agreement can be reached.
Contract Breaches and Fraud
All business partners have a fiduciary duty to the business and the other partners. This duty requires them to act in the best interest of the business. Conflict sometimes arises because a partner engages in self-dealing, misappropriation of business assets or intellectual property, fraud, or breach of contract.
If your business partner engages in any of these activities, an attorney is a crucial resource to protect your business and get compensation for any damages that may have been inflicted on you.
Leading Attorneys to Resolve Business Disputes in Georgia
The attorneys at Gaslowitz Frankel have decades of experience litigating business disputes between conflicting parties. We will relentlessly pursue the best outcome for our clients while consistently focusing on your goals and desires. For trusted legal advice, consult the expert legal team at Gaslowitz Frankel LLC.
