Business partners don’t always work together as efficiently and cooperatively as they may have hoped. Disputes do arise and need to be resolved, sometimes through litigation.
But why would these disputes happen? Every situation is unique, but the following are a few potential reasons.
They blame each other for the company’s struggles
Often, when the business is simply struggling financially, each business partner may blame the other. They may even claim that the other person took deliberate steps that harmed the company or did not uphold their duty of care to the business itself.
They have different goals and priorities
It is helpful for business partners to at least feel like they are working toward the same goal. If one person’s priority is on making money and the other’s focus is on revolutionizing an industry or providing excellent customer service, conflicts could arise over the direction the business is heading.
They don’t agree on their roles and responsibilities
One of the more important things to outline in a partnership agreement is simply what responsibilities each person will have. Conflicts often come up when both people believe that they have the right to make the same decisions—design choices for products, hiring decisions, partnerships with other local business owners, etc.
There are financial issues
Finally, finances often cause disputes in a variety of ways. This could be related to how much money has been invested in the company, how earnings should be divided or whether one of the business partners is misusing company funds.
If these disputes do lead to litigation, it’s crucial that the business partners know what steps to take. It can help to work with an experienced law firm.
