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Tips for settling partnership disputes

Tips for settling partnership disputes

| Sep 3, 2020 | Uncategorized

If you are having a dispute with your partner, it may be possible to resolve it without the need to enter a Virginia courtroom. In many cases, disagreements can be settled quickly or avoided entirely just by having a written operating agreement in place.

Create clear rules about how money will be handled

Ideally, your operating agreement will clearly state how profits are allocated among partners. It may also be a good idea to require all partners to review expense reports on a regular basis to ensure that generally accepted accounting rules are followed at all times. Doing so may prevent personal expenses from being classified as business expenses or prevent a partner from inflating expenses for tax or other purposes.

Consider bringing in new investors

A dispute between partners may be resolved by bringing in additional parties to help manage the company. You may also attempt to dissolve the partnership by buying out other owners or by filing a lawsuit. If a lawsuit is filed, a judge may appoint a provisional director to oversee the business until the matter is resolved.

Spend time researching partners before entering into an agreement

Performing due diligence before entering into a partnership may make it easier to find someone who you are more likely to work well with. If you are partnering with an existing company, it can be in your best interest to review the company’s finances and learn more about the people who make decisions for the organization.

Hiring a business law professional may make it easier to create an operating agreement or take other steps to minimize the possibility of a business dispute. An attorney may also be able to represent your interests during settlement talks or in court if a case goes to trial.

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