Common Reasons for Business Partnership Disputes

The lack of conflict resolution skills between business partners can damage a business. A business’s survival depends on partners working together through conflict and finding workable solutions.

Owning a business is rewarding but also stressful. Awareness of common pitfalls in Phoenix business partnerships can prevent unresolvable disputes, protecting your business and investment. Working with a Phoenix business partnership dispute attorney to avoid these common mistakes can create a path that benefits your business now and in the future.

The Use of Resources

Decisions on how financial resources should be used can lead to challenging confrontations. Each partner can see a business need as a critical piece requiring financial resources. One way to avoid this common disputed area is by establishing a partnership agreement detailing each partner’s role in the business during business formation.

Delegating each partner’s responsibility in determining the use of funds can eliminate the tense conflict of having to decide together.

Unequal Distribution of Work

Partners contribute to businesses in many ways. Some are responsible for the daily operations of a company, while others serve as investors to keep the business financially stable. It may be that business partners are working together to tackle the daily workload.

Work distribution can vary daily, but disputes can arise when one partner continuously feels they experience a heavier lift in getting tasks accomplished. Setting initial expectations and delegating work is critical. It is also beneficial to set a schedule to revisit the distribution of work to determine if adjustments should be made.

It may be beneficial to establish quarterly meetings to evaluate workloads. Some business situations change rapidly, while others evolve at a slower pace. Working towards an equal distribution of work prevents burnout, hard feelings, and quiet quitting on your partnership, creating a more equitable workload balance.

Assign Authority

Businesses often have multiple operations going at any given time. Assigning authority over each operation allows partners to understand their role in that project. Business owners are often driven and used to taking the reins in making decisions.

Assigning authority allows each partner to have a voice in decision-making, eliminating battles over the final decisions. Each partner has control over their specific task.

A Breach of Fiduciary Duty

One of the most challenging business partnership disputes is a breach of fiduciary duties. Partners have an obligation to act in the best interest of the business. There are many ways partners damage a business.

Avoiding these mistakes is imperative to a successful partnership.

  • Misusing funds
  • Personally profiting from business that should benefit the company
  • Sharing company secrets
  • Failing to disclose pertinent information
  • Exposing a partnership to liability through negligent behavior

Business partners display a certain amount of vulnerability when they place trust in each other. A breach of fiduciary duties can lead to costly legal ramifications. Phoenix partnership disputes can be expensive and generally require skilled legal representation.

Establishing Strong Business Partnerships in Phoenix

Starting with solid partnerships takes work to ensure a successful business. Partnerships require individuals to work together intimately to make essential decisions that can determine financial successes or failures. Work with a leader in Arizona business partnership disputes to avoid these pitfalls.

The Law Offices of William D. Black has paved successful business pathways and partnerships for over 30 years and continues to offer sound guidance in business decisions.