How Do You Resolve a Partnership Dispute?

If you and your business partner are at extremes odds with each other, it can be difficult to know where to turn next. While disagreements are a normal part of any working relationship, once they become heated, it can be hard to deescalate. 

Here are some tips for resolving a partnership dispute, some of which can help you salvage the business; others of which will set you and your business partner on your own separate paths. 

Solutions for Resolving a Partnership Dispute

  • Mediation – Engaging a neutral third party to help you work through your business difficulties can be an effective (and cost-effective) way to reach a resolution. A trained mediator is able to facilitate a productive conversation that could ultimately lead to a stronger business partnership. 
  • Buy-out or sell-out – If after mediation it becomes clear that the partnership cannot continue, partners should refer to their shareholder’s agreement to see what was stipulated in terms of a buy-sell agreement. You will also need to conduct a valuation of the company to understand how much everyone’s interests are worth. One partner may choose to buy out the other, or you may choose to sell the business altogether to new owners. 
  • Dissolve the corporate entity – Another option if you can’t agree on a path forward for the business and relationship is to dissolve the corporate entity. While the process itself is not difficult, it can become very difficult if both parties don’t agree on dissolution as the next step. If the courts need to become involved with a judicial dissolution, then the business owners lose control over the process and will be left to abide by what a judge decides.
  • Pursue litigation – Litigation should be a last resort for conflicts, but sometimes it is the only option especially if there has been fraud or other unlawful behavior. If you’re going to pursue legal action, it’s important to talk to an experienced business law attorney so you understand your options and their implications.

No one starts a business thinking it will end in a dispute, but it can and does happen. If you find yourself in a difficult situation with your business partner, call us first at Silverberg|Brito, PLLC. Our commercial law attorneys can advise you on the best course of action so you can achieve a resolution that meets your needs.

Related Posts

Leave a Reply