Partnership Disputes

 

 

FAQ

Disputes between business partners occur for a variety of reasons. The most frequent causes of partnership breakdowns include:

 

  • A partner acting outside their authority
  • A partner not committing sufficient time or resources to the partnership
  • A partner not disclosing the books and records of the partnership
  • A partner wishing to dissolve the partnership
  • Misappropriation of partnership assets
  • Disputes arising from a dispelled or deceased partner
  • Quite simply put, due to a partner “not pulling their weight”

 

Why (or when) would someone need this service?

 

If you have a material dispute with your business partner(s) and wish to know what options are available to you then you should contact us to discuss your options

 

How does the process work?

 

The first thing to do is establish whether there is a written partnership agreement in existence. It is this document which will usually govern the relationship between you and your business partner(s), and which will need to be referred to, in the event that a dispute between business partners.

 

If no written partnership agreement exists, or the written agreement doesn’t cover the issue between the parties, then the parties to the dispute may have to refer to the Partnership Act 1890. However, you should be aware that the Partnership Act 1890 in some places contains fairly vague provisions to allow a degree of flexibility. For instance, under the Act, all partners are entitled to equally share in the capital and profits of the business and should contribute equally to losses. However, this may not always produce fair and equitable results.

 

Once instructed we will consider the applicable law and consider the options available to you. If appropriate, we will write to your business partner(s) to inform them of the dispute and to request that they take measures to rectify the situation. Furthermore, if financial losses have arisen as a result of the dispute, we will seek to recover such losses on your behalf.

 

It is sensible to consider whether an early meeting between the parties may lead to a negotiated settlement being agreed without the need to issue court proceedings. It is a more cost effective and speedier process to attempt to resolve disputes via an early meeting, or through the use of mediation rather than by issuing court proceedings. However we recognise that it is not always possible, or appropriate, to resolve disputes in this manner and in some cases it will be necessary to issue court proceedings.

 

How long does the process take?

 

If the parties are open to working towards a negotiated settlement then it may be possible to resolve the dispute within a matter of months.

 

If court proceedings are issued, it will normally take between 18 and 24 months for the dispute to reach trial. It is however the case that the vast majority of disputes settle on agreed terms  prior to trial.

 

How much does it cost?

 

We will provide you with an estimate of costs at the outset once we have been given details of the dispute.

 

What you should consider before calling?

 

It would be helpful if you could have to hand any partnership agreement you have with your business partner(s) and/or any relevant correspondence you have had with your business partner(s) regarding the dispute.

Meet the Partnership Disputes team