Forming a business with a partner can be a great way to raise capital and share the responsibilities of running a business. However, disputes can arise between business partners over money, the direction of the business, and other matters. There are a few things residents of Virginia and other states should keep in mind when resolving partnership disputes.
Partners may be able to avoid disputes if they memorialize a thorough written agreement before opening a business. A partnership agreement should discuss how profits and losses will be distributed, how responsibilities of the business will be shared, and other concerns. If partners clearly memorialize expectations in writing, it might make it easier to resolve disputes later on, and an experienced civil litigation attorney should be able to draft a partnership agreement that can establish expectations around a business.
It is important to try to resolve partnership disputes before escalating the problem. Sometimes, partners can talk to each other and can work out their issues without involving a third party. Other times, partners may wish to work with a mediator who can help partners resolve their disputes. If partners are able to resolve their issues with mediation, they should have a lawyer memorialize the understanding between the partners.
If partners have too many issues working together, they may wish to arrange a buyout. One partner can provide compensation to the other partner for the other share of the business, and then the purchasing partner will continue to run the business. In other situations, partners can try and sell the business to a third party and split the proceeds. Business brokers and other professionals can help partners find potential outside buyers for the business.
If partners are unable to resolve their disputes, they may need to file litigation. Lawsuits can settle rights between partners and, in extreme situations, can force the business to dissolve. It is important to speak with a trained civil litigation attorney when contemplating a lawsuit to ensure that you have the best chance at success during litigation.