When starting a business, many entrepreneurs choose to do so with a partner. For one, establishing a partnership has the benefit of capital from two — or more — people. Furthermore, each individual in a partnership brings their own skills, knowledge and connections to the table, which can help with growth and operations. This arrangement can work well when partners see eye to eye but could cause trouble when they don’t.
A good way to handle partnership disputes is to take measures to avoid them in the first place. Here are some tips to prevent them from arising.
Consider all possible issues
Business partners often fail to consider future challenges when they join forces. Instead, they tend to focus on plans for growth and get caught up in the excitement of starting a new venture — which is understandable. But acknowledging what could go wrong is a crucial step in keeping disputes from derailing their goals.
When starting a venture, business partners must discuss how they plan to resolve any issues that arise. Among the most common partnership disputes are:
- Disagreements about business goals and values
- Disagreements about outside investors
- Disagreements about shares in ownership
- Disagreements about workloads
- Disagreements arising from accusations of misconduct
Put a plan in writing
Business partners will want to draft a written agreement as part of their plan for addressing conflict. This document, known as a business partnership agreement, lays out and enforces the steps for dispute resolution. Moreover, it establishes each partner’s role in the enterprise and includes crucial details about its structure and operation. These types of information make the terms of the partnership clear, which can also help prevent disputes.
Consult an attorney
Without a proper framework in place, partnership disputes are difficult to prevent and resolve. Even with a strong agreement, challenges could still arise. Business owners may need to seek legal help in these situations.