Going into business with a partner can be a daunting experience, as there are bound to be a number of complex questions running through your head. How well will you work together? What if you find out you have different ways of doing things? What happens if something goes wrong or the business relationship breaks down altogether? It can be a stressful time, but you don’t have to go through it on your own. Here’s a brief guide on how to start dealing with business partnership disputes.
Can you resolve your differences?
Fortunately, many partnership disputes are easily resolved, allowing you to carry on with your business with no further problems (or at least with the knowledge of how to deal with similar problems in the future). However, some disputes are irreconcilable, and often – whether for the sake of the business or for the sake of your friendship – it is decided to dissolve the partnership entirely. Just make sure you talk through everything with your business partner prior to making any important decisions – and make sure you get specialist legal advice about the implications of any partnership bust up from an experienced solicitor and your accountant.
Know Your Rights & Ask For Professional Help
If you’ve come to the conclusion that the business partnership can’t be saved, you will be looking at dissolving the partnership. First of all, you need to know what your legal position actually is – and particular what rules govern your partnership. If you and your partner had a written partnership agreement on entering into the business, you will be very clear on what your rights are. But what if an official partnership agreement was never put into place? This isn’t the time to panic. In the absence of a written partnership agreement, the rules of your partnership will be governed by the 1890 Partnership Act.
You can either work through the terms together, or alternatively seek help from a mediator or intermediary who can sit down with you and go through everything from an impartial point of view- it’s worth doing it this way to avoid a lengthy and expensive court battle or settling for a court-dictated decision.
You will also need a good solicitor – make sure you contact an experienced litigation solicitor with plenty of experience of partnership disputes who will be able to give you more information regarding your position.
Avoiding Business Partnership Issues In the Future
If you’re considering entering into a partnership but aren’t sure whether it’s right for you, always ask for professional advice prior to agreeing to anything with your potential business partner. A partnership can be created simply by the fact that two or more people are entering into a business together, but if you want to have control over the rules governing your partnership, it’s essential that you have a partnership agreement be written up and signed by all partners beforehand. Not only will this help you if the business relationship unfortunately breaks down, but it will also give you peace of mind when conducting your business.
It is an unfortunate truth that even the best of business partnerships can break down, but making sure a written agreement is in place and always getting specialist legal and accountancy advice so you know your rights, can make this stressful process much smoother and less daunting.
Tim Bishop is the senior partner of Bonallack and Bishop – Solicitors specialise in partnership litigation for clients throughout England and Wales. For more information about business partnership disputes, visit their specialist http://ww2.partnership-dispute.co.uk website, or give their team a call on 01722 422300.