How To Avoid Business Partnership Disputes


Many people, whether spurred on by the recession or government incentives, are looking at creating their own business. They will be starting on this venture with what they will believe to be a successful business plan.

Of course, there is no way of knowing how things will turn out; no-one saw the crash of 2009 coming.

Starting a business entails much more than just opening a shop and waiting for customers to flock to the door, or having an idea, however good, and thinking that an angel will take it worldwide. Creative and artistic people often don't have a clue about money and business procedures; on the other hand, there are many people who can only see the financial potential of their ideas. It seems to be a match made in heaven, while one partner designs and creates the product, while the other looks after the 'boring bits'.


This is fine in principle, but only if the partners stick to their respective areas of expertise, and roles are clearly defined. Any blurring of these roles could lead to conflict and partnership disputes. However rosy you may feel your future is going to be, it is essential to appoint experienced business solicitors and have a partnership agreement drawn up, an agreement which both parties are happy with. If one partner is investing the bulk of the capital, or all of it, example, the other partner may need to agree to an unequal share of profits. A partnership agreement redrafted by experience solicitors can address many things – not just financial issues. For example, it can deal with how much time each of the partners are expected to work – it could be that both partners are expected to work full-time, or sometimes, if one partner has put in more cash than the other, they may play a lesser role in day-to-day management. One partner who feels that they are doing the majority of the work may begin to feel aggrieved, and this could be the cause of a business partnership dispute.

Sticking to both the spirit and the wording of your agreement will help to avoid any partnership disputes. As your business, hopefully, grows, personal circumstances may change, and you and your partner may wish to have a look at your partnership agreement from time to time, to see if circumstances have changed and if the agreement is still accurate and relevant. All partners should keep in touch with both their solicitors and bank manager, as they will be of great help in advising you and helping to prevent any partnership disputes.

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Tim Bishop


Author: admin

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