A Partnership Disputes Lawyer Advises on How to Avoid Disputes

Posted by SchleifmanLaw on October 28th, 2016

Starting up a business is an exciting prospect and most go at it with all zeal and excitement. When it is a partnership, the excitement is even more palpable because you expect the synergy from the partners will help you make it. Well, according to the U.S Small Business Association, most startups fail within the first 7 months of launching. A study published on Forbes shows that most of these failures arise from partnership disputes. 

Well, where more than one person is making decisions, you expect a dispute but your partnership disputes lawyer will tell you that most of these issues can be avoided. This is how big brands are able to operate seamlessly even though they are owned by multiple partners. 

So what can your business learn from these successful corporates? Here are some ideas:

1. Invest in a Qualified Business Attorney 

Business lawyers are highly experienced in corporate issues. From business registration to insurance, they will guide your partnership right from the start. By investing in an attorney early enough, you are assured that all operations are founded on solid legal advice and it is hard for a dispute to arise in such an environment. A business lawyer is not just there to assist with documentation but also works diligently to lay the groundwork for smooth operations. Your attorney knows they will be liable if the contract they oversaw turned out to be the cause of dispute.

2. Designate Roles

This is one of the major causes of disagreements among business partners.  Every Limited Liability Corporation must have a roles agreement to avoid disputes in future. If you are directors and there is a management team, it is important for the partnership agreement to designate what roles the board will be playing out vis-à-vis the management. 

3. Income and Revenue Distribution 

This is another sensitive issue and when starting out, you need to have it in the contract. Income disputes lead to over 90% of partnership disputes and it is important to avoid this pitfall. When it comes to money issues,you need a lawyer to resolve any disputes. If you didn’t use an attorney when drawing up the partnership agreement, you will have a hard time resolving the dispute. Luckily, a qualified partnership disputes lawyer will help your business through mediation and arbitration. This will save your business and bring back the harmony.

4. Documentation 

Business documents are critical for any business. When starting out, you might not appreciate the importance of business contracts but as you expand, it will become apparent that the LLC requires legally binding contracts. These documents will show capital distribution of each partner, roles, income distribution, business valuation, new capital injection and company dissolution. With these documents in place, it is easier to resolve a partnership dispute. 

The importance of a partnership disputes lawyer for LLCs cannot be overemphasized. These legal experts have intense knowledge on corporate law and they use this expertise to initiatemediation or arbitration.  If you have a dispute with other partners, your lawyer can also represent you in court or in an arbitration process.