Partnership, Director & Shareholder Disputes

Partnership disputes can occur for a wide variety of reasons, even in successful businesses.

It is important that they are resolved quickly for the sake of you, your partner, your clients and your business.

Ideally, your partnership agreement should determine what happens in certain situations. However, often it doesn’t and even when it does, it is wise to seek legal support to help you through this period.

Typically, partnership disputes fall into the below categories:

1. Misconduct

Misconduct can range from:

  • Being rude or aggressive to other partners or clients.
  • Substance-abuse or unhealthy addictions.
  • One partner stealing business opportunities. Sometimes one partner will take business that belongs to the partnership into his own independent business.
  • Breaches of the partnership agreement.
  • Fraud– which could be as straightforward as one partner drawing money more than he should or fabricating expenses or as complex as creating false clients and accounts.

It is important that these are addressed and dealt with as quickly as possible before they can escalate further and cause more damage.

2. A Partner Doing Less than their Fair Share

This is a common cause of partnership disputes. This situation can come about for several reasons:

  • Most of the business coming in is for one type of work which cannot be done by that partner.
  • The market has evolved and it is now only profitable to do the type of work done by you.
  • Your partner spends most of his time on holiday or the golf course, arrives late or leaves early.
  • Chronic poor health issues. These issues need to be managed sympathetically but someone’s health can deteriorate to the point where they can no longer properly perform their role.

It can also happen that your partner tells you that they want a better work life balance and want to work less hours, or they may even want to work from abroad.

Again, it is important that you look to resolve these issues early on before they get worse.

3. General Partnership Disputes

Disagreements are usual in a partnership but what happens if they escalate and become disputes which are tearing the business apart. These could be issues around:

  • Authority and responsibility– who does what and what is the chain of command?
  • How to use the partnerships income– this could be a disagreement over promoting the business, new offices or the the lease of vehicles.
  • Choice of supplier– the choice of who to source needed products and services from can cause partnership disputes.
  • The company objectives– it can happen that one partner wants to aggressively grow the business and make lots of money while the other values his time more and would prefer to stick to his current pay, workload and risk levels.

Most of these types of disputes can be amicably resolved through negotiation and mediation.

4. A Breakdown in Your Professional Relationship

Over time respect and trust can decline to a level where the relationship is no longer tenable. This can happen for various reasons and you may decide that it is time to go your separate ways.

The Solution

Else Solicitors will help you get the best result for your business. We will always consider the negotiation, mediation and arbitration routes first. These are quicker and cheaper than going to Court and are the preferred way to settle disputes.

If no agreement can be reached, you will need to go to Court to formally request that your partnership is dissolved and determine how the net assets will be shared. However, this is a time consuming and expensive option and is always a last resort.

What We Do Best

Else is a modern, dynamic and forward thinking team of solicitors. We offer the expertise you expect from a large, traditional law firm.

Else Solicitors has been helping partners to resolve their disputes for many years. Our understanding team of expert negotiators and solicitors have an enviable reputation for always going the extra mile and offering you a personal, jargon free service.

If you require legal support to resolve a partnership dispute, then we invite you to get in touch with our team today.

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Partnership, Director & Shareholder Disputes

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Steve joined Else after spending over 20 years in law practices in Worcestershire and the West Midlands specialising in dispute resolution particularly High Court litigation.

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Stephen Stewart

Dispute Resolution Solicitor

How can we help?

Get in touch.

For more detailed legal advice on how we can help, please contact the dispute resolution team on 01283 526200, alternatively you can send us a message and we will get in touch at a time that suits you.