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What causes disputes between business partners?

On Behalf of | Jan 10, 2024 | Business & Commercial Law

If your company is large-scale or intends to be large-scale, then you’re most likely going to need some help. Many business owners opt to create a partnership.

Having a business partner comes with numerous benefits. You can share the financial burdens, liabilities and workloads and utilize one another’s expertise.

With that being said, business partnerships don’t always work out. Fallouts can occur and they are usually detrimental to the company if prolonged.

What causes disputes between business partners?

Financial issues

Numerous financial commitments come with being a business partner. The company may need both long and short-term investments. How will this be distributed between partners? When can a return on investment be expected? Will both partners be involved in negotiating significant deals?

Profit shares can also be a source of dispute. Will the profits of the business be split equally?

Unfair workloads

Even if the profit shares and investment expectations are equitable, disputes can still arise in terms of workloads. What will the role of each partner be? Will one partner be expected to put more time in with staff and clients? Will one partner be expected to travel extensively? Unfair workloads can cause resentment, which may lead to lengthy legal disputes.

Disputes are bound to arise between business partners from time to time. What matters is that these disagreements aren’t blown out of proportion and are resolved efficiently.

If you find yourself in the midst of a dispute, it’s important to take steps that protect the business. Seeking legal guidance will provide you with dispute-resolution options.