Business partners are not always on the same page. Indeed, even the best of partners can end up in a serious dispute over an important issue. When a disagreement escalates to a full-blown dispute, it has the potential to cause serious damage to a business.
It is crucial that business partners are able to limit the risk of disputes and, should one occur, effectively resolve the matter without major problems. Here, our Riverside business litigation attorneys offer four tips to help you protect your rights and your interests.
- A Written Agreement is a Must for Every Partnership
In order to form a general partnership or limited partnership (LP) in California, you need to submit certain documents to the state. However, you are not required to operate under a written partnership agreement. Nonetheless, all business partners should have a clear, comprehensive, professionally drafted operating agreement. Your business is too important to rely on word-of-mouth and a general understanding. A written agreement is one of the best ways to protect your personal interests and reduce the risk of damaging partnership disputes.
- Business Partners Need Procedures to Address Disagreements
Within a partnership agreement, it is highly recommended that you have specific procedures for addressing and resolving your disagreements. No matter how good your relationship is with your business partner(s), you should always be prepared for something to go wrong. Running a business is complicated, especially in the modern world. Reasonable people can come to vastly different conclusions on some critical issues. If your partnership agreement includes effective dispute resolution measures, you will be in a far better position.
- Be Proactive: Early Action Helps to Resolve Dispute at the Lowest Level of Conflict
As far as business partner disputes are concerned, one of the biggest mistakes you can make is to simply ignore a problem. Unfortunately, disagreements between business partners that are allowed to simmer for too long can boil over into serious and destructive disputes. The last thing that you want to do is to cause damage to your own company through a protracted internal fight.
The sooner you take action, the easier it will be to find an answer. In many cases, disagreements can be solved internally with an open, honest, good faith conversation. In other circumstances, it may be useful to consider more formal dispute resolution. For example, mediation may be a sensible option to work towards a collaborative resolution.
- Know All the Options to Protect Your Rights
Finally, it is imperative that you always keep your personal financial interest in mind. Your partnership is your business. While it is generally best to look for collaborative solutions, you always retain the option to escalate the matter. Depending on the specific nature of the dispute, there may be many different options available. As an example, you may have legal rights under California’s Uniform Partnership Act or through a breach of contract claim. A Riverside business litigation attorney with experience handling partnership disputes can review your case and help you formulate a plan of action.
Contact Our Riverside County, CA Business Partner Dispute Lawyers Today
At Wagner Zemming Christensen LLP, our California business litigation attorneys are proud to provide top quality, client-centered representation. We will protect your rights and assist you in finding the best solution. If you have any questions about partnership disputes, we are more than happy to help. Contact us now for a completely confidential initial business law consultation. With a legal office in Riverside, we serve communities throughout Southern California, including in Fontana, Jurupa Valley, Moreno Valley, and San Bernardino.