Most business partnerships begin with the best of intentions. While we may anticipate some challenges and potential obstacles, rarely do we anticipate having serious disputes with our business partners.
But partnership disputes do occur. Some are relatively minor, such as differences of opinion on the most effective forms of marketing. Others are more serious and complex — such as mismanagement of assets. And in some cases, business partnerships simply run their course.
When disagreements or issues do arise, an experienced partnership dispute lawyer can help the parties to find a resolution, ensure that the partnership is properly dissolved, and protect your interests, should the matter go to trial. A partnership dispute lawyer may also be able to help all parties reach an amicable agreement and keep their business intact.
How Partnership Disputes Arise
Partnership disputes can arise for many reasons. Running a business can be complex and stressful for partners, and some disagreements are inevitable. Some examples of issues that can jeopardize partnerships include:
- Unequal distribution of work between the partners
- Making employment decisions without input from other partners
- Failing to disclose expenses and debts
- Disagreements about how to utilize profits from the business
If partners cannot resolve their issues, it may be necessary to dissolve the partnership.
What Is a Partnership Dissolution?
Partnership dissolution is the process of closing down a business and terminating the contractual relationship between the parties. In many ways, a partnership dissolution is like a divorce. The process can be amicable (i.e., the parties agree to close the business) or contested (i.e., one or more partners want to keep the business open).
If the partners agree to the dissolution, they take formal steps to close the business. This can include filing the necessary paperwork with government agencies, canceling licenses, notifying customers, and closing bank accounts.
If the dissolution is contested, it can end up in litigation, with the court deciding how the partnership will be dissolved. If there is a written partnership agreement, then the court will seek to enforce its terms. In the absence of an agreement, the court will apply Texas partnership dissolution laws to determine the terms of the dissolution. Consulting with a partnership dispute lawyer in Texas can help ensure that your rights are protected.
Reasons to Hire a Partnership Dispute Lawyer
Some types of partnership disputes are too complex for partners to resolve on their own. Specific reasons that you may want to hire a partnership dispute lawyer include:
- A breach of fiduciary duty. Business partners owe each other fiduciary duties to act in good faith — for instance, to not compete with the partnership or engage in misconduct. If your business partner has breached their fiduciary duties, you may be entitled to compensatory and even punitive damages.
- Operational disagreements. Partners may simply disagree about the daily operations or direction of the business, such as which business opportunities to pursue and how to spend profits. A partnership dispute lawyer may be able to help resolve these types of disagreements, so partners can continue working together.
- Misconduct. The actions of one or more partners may result in an unworkable situation. In these cases, the other partners may seek to expel the wrongdoer from the partnership. Partnership agreements typically have provisions that govern the expulsion of a partner from the business if the partner has engaged in misconduct.
- Breach of contract. In addition to the terms of the partnership agreement, partners may have other contractual obligations such as a non-compete agreement or non-disclosure agreement. When a partner breaches the terms of the partnership agreement and/or other contractual obligations, a partnership dispute lawyer can help find a solution or represent your interests at trial, if necessary.
Need to Talk to a Partnership Dispute Lawyer in Texas?
The experienced legal team at the Padua Law Firm has helped Texas-based businesses resolve a broad range of partnership disputes. Some of the types of cases that we handle include:
- Partnership agreements and other business contracts
- Operational disputes
- Business failures
- Contested and uncontested partnership dissolutions
- Partner expulsions
- And more…
If you or someone that you know is experiencing a partnership dispute, the Padua Law Firm can help. Contact us today to schedule a free consultation.
