Effective Resolutions To Partnership Disputes
At NachtLaw, we have represented many shareholders and partners when they have disputes with other business owners or the corporation itself. We typically do not handle securities litigation for individuals who have purchased shares or stock in the marketplace.
Our firm’s founder, David Nacht, has helped many business partners who are in disputes obtain their fair share. He has extensive experience representing technology, software, physicians and manufacturing business owners who are founders or early investors, as well as employees.
We Can Help You Resolve Nearly Any Type Of Business Or Partnership Dispute
Our firm is ready to provide skilled guidance and experienced representation to clients facing nearly any type of dispute, including those alleging:
- Breach of contract
- Breach of fiduciary duty
- Disagreements over how to run the business
- Expulsion of a partner
- The breakup or dissolution of a partnership
We understand that it is vital to resolve these problems quickly and effectively so that they do not devolve into protracted litigation. Attorney Nacht has earned a reputation for his skill in the courtroom and for his no-nonsense approach to negotiation. He is a problem solver who will never waste your time or money.
You May Have More Options Than You Realize
Depending on your business and the nature of your dispute, you may want to get out of the business, remove a partner or resolve the dispute in a way that allows operations to resume as normal. Your ideal outcome will help inform our resolution strategy. Common options for resolving business disputes include:
- Reaching an agreement through mediation
- Dissolving the business, with or without the help of a court
- Having one partner buy out the other
- Having all current owners agree to sell the business to a third party
- Attempting a freeze-out merger (if you are a majority stakeholder)
- Taking the case to trial and resolving through litigation
- Filing for bankruptcy (if circumstances warrant)
No matter what your goals are, chances are good that at least one of these options is available to you. When you contact us for a consultation, we will give you a frank and honest assessment of your legal options and advise you on the likelihood of success for each strategy.
What Should I Know About Business Partnership Disputes?
Our legal team is committed to providing strategic advocacy in every aspect of business law. We develop solutions to help Michigan and Ohio-based business clients avoid disputes and operate effectively. One of the ways we help our clients is in facilitating, negotiating and settling business partnerships. Here, we have answered some of the questions that our clients frequently bring to us when discussing partnerships.
How can a partnership resolve deadlock?
You can use provisions in your partnership agreement to create a decision-making balance that prevents deadlocks. For example, you could split profits evenly, but have 51% of the control over decisions. Another provision could stipulate that one partner sell their share to the other in the event of a deadlock. In a 50/50 partnership, arbitration or litigation might be necessary.
How do business partners resolve conflict?
Private solutions such as negotiation or business mediation are almost always preferable to a trial. When needed, though, arbitration or litigation can bring about a solution to the conflict.
How do you split a 50/50 partnership?
Generally, the remaining partner will proportionately compensate the partner who is leaving.
How do you separate from a business partner?
If your business partner does not agree to separate, you may have to take several steps. These could include:
- Filing articles of dissolution
- Relying on the methods of dispute resolution in your partnership agreement
- Offering to buy them out
- Using alternative dispute resolution
- Going to trial to receive a court judgment
At every step, you should have counsel to help you carry out the process correctly and avoid making legal errors.
What is a partnership agreement contract?
A partnership agreement contract is a document that establishes the practices, rules and expectations for business partners. It can address matters such as business responsibilities, compensation, dispute resolution and dissolving the partnership.
What things may cause disputes in a partnership?
Partnership disputes can arise for a variety of complicated reasons depending on the unique culture of a business. Some common reasons include:
- Breach of duty
- Fraudulent activity
- Contract disputes
- Workload distribution
- Compensation or division of profits
- Different visions for the business
This list is by no means complete. Major conflicts can arise over seemingly small issues.
What is partnership dissolution?
Partnership dissolution refers to the end of a business partnership, whether one partner chooses to leave or the other partner forces them out.
What are my rights as a business partner?
Some of a business partner’s fundamental rights include:
- Right to fair share of profits
- Right to inspect records and books
- Right to duty of care
- Right to good faith
- Right to loyalty
Your share in these rights is proportionate to your share as a partner.