3 Tips for Avoiding and Resolving Partnership Disputes

Running a business with a partner can be enjoyable and fulfilling. This type of collaboration is common in many organizations and often works well. However, a partnership is not immune to disputes, even if you are in business with a trustworthy friend. 

partnership dispute can quickly turn into a bitter, nasty legal battle with someone you know and trust. Thankfully, you can prevent things from getting out of hand by putting in a little effort and practicing patience. Here are three things you can do to prevent a dispute and resolve one, if necessary.

1. Make sure you have a written agreement

First things first–a partnership agreement or operating agreement is crucial to avoiding problems. This type of agreement should address the following issues:

  • The role of each partner
  • Who controls what part of the company
  • The duties and obligations of each partner
  • Capital contributions
  • Compensation and distributions
  • When and how the partnership can end

This agreement should describe each of these in detail to avoid confusion, disagreements and arguments. 

2. Face disputes head-on and focus on solutions

If a dispute arises, you should set aside time to discuss it. A relaxing dinner or a meeting after-hours or over coffee is a better way to talk about problems than during the middle of your workday. Prioritize negotiation and solving the problem, and focus on the outcome you desire instead of the dispute itself. 

3. If it gets worse, consider a bold solution

Sometimes, arguments cannot be solved, no matter how much you once trusted your business partner or your efforts to find a solution. In this situation, you may need to hire an attorney to decide your next course of action. You should not terminate the partnership on a whim without legal counsel. 

Operating a company is difficult at times, but you can follow these three pieces of advice to avoid and handle disputes.