A business partnership exists when two or more parties come together to conduct business with one another. This can be a partnership between two or more persons, or between multiple business entities. In some cases, the partnership is formed for a specific business aim.
Partnership disputes are unsettling for any business and need to be resolved quickly to prevent financial losses. These fights can spell disaster for even the most friendly of partners.
Most Common Reasons For Partnership Disputes
There are some common trends that often lead to partnership disputes. When not resolved quickly or amicably, these disputes can lead to mediation, arbitration, or even towards costly litigation – not to mention potentially bad PR or media attention:
- Breach of Contract: There is a large body of the law devoted exclusively to contract law. Usually breach of contract involves financial obligations or monetary reimbursement. Contracts also contain language that outline performance of duties and indicate who is responsible for each aspect of the activity. When there is a violation of any of the terms of a contract, a lawsuit is often filed to force compliance with the terms of the agreement or to seek monetary reimbursement or compensation for losses.
- Breach of Fiduciary Duty: Texas law recognizes fiduciary duties can arise in many contexts, including partnerships. It takes skill and successful litigation experience to analyze complex partnership disputes arising from breach of fiduciary duty.
- Business Asset Misuse: When one partner abuses their power and authority and steals from the company through fraudulent activity, they misappropriate assets. If one or more of your business partners is stealing from the business, either funds or property, we can help.
- Failure to Delineate Authority: If there is not a clear separation of responsibility among the partners, it is inevitable that conflict will arise as both partners try to work on overlapping issues and/or neglect other areas. Using partnership and employment agreements, all partners should make certain that they understand both their rights and their obligations within company operations.
- Fraud: We help individuals and businesses that have suffered financial harm as a result of fraud. Partnership fraud is when a business partner knowingly misrepresents themselves or provides inaccurate information to gain an advantage for the business or for themselves.
- Non-Compete Violation: To protect company goodwill and confidential information, a Texas employer can utilize a non-compete agreement. A non-compete agreement is enforceable in Texas if it is supported by valid consideration, and is reasonable in time, geographic scope, and activities to be restrained.
Often, a key objective of a partnership dispute is to avoid partnership dissolution. Many disputes can be overcome in order to keep the partnership alive and prosperous.
What Is Dissolution?
When partners are no longer able to continue in business together, dissolution is often the only answer. Partnership dissolutions can be complex, requiring the advice and guidance of experienced legal counsel.
Dissolution refers to the process of shutting down a business and ending the official and contractual agreement between the parties. While many people think closing down a business is simply shutting the doors, there are actually numerous steps that must be followed. In order to dissolve a business, the owners must first agree to close. This can often be tricky if one or more partners want to dissolve while others want to remain open. After deciding to close, business owners must file paperwork with state and federal agencies and cancel any permits and licenses. Next, owners must pay all taxes and debts and notify creditors, employees, and customers of the dissolution. The business and remaining assets can then be sold, with the profit distributed to the owners.
Successful Business Divorce
Partnership disputes often lead to what many people call a “business divorce,” and these partnership disputes can be resolved in many ways. At Feldman & Feldman, we work with partners and business owners facing disputes to create unique solutions. If a limited partner would like to withdraw, with or without the support of the general partners, Feldman & Feldman is also experienced in handling buyout agreements. We can facilitate a smooth and advantageous transition for your business.
The partnership dispute lawyers at Feldman & Feldman are also familiar with the different types of general partner liability, from joint and several liability of general partners to vicarious liability for the acts of employees and direct liability for individual actions. We can help determine who is responsible and protect your best interests.
Houston Partnership Dispute Lawyers
If partners cannot resolve their differences and the dispute is heading toward the courtroom, you should contact a Houston partnership dispute attorney. Getting legal help quickly could be critical to having success in your case. We can explain your rights and obligations, and determine to what extent your partner has similar rights or obligations.
Partnership disputes do not pop up overnight. Oftentimes disputes begin with small disagreements that snowball out of control. The Houston partnership dispute lawyers at Feldman & Feldman can help protect your business and your best interests. The sooner you have a partnership dispute lawyer by your side, the sooner you can resolve your disagreement. Contact us today to schedule a consultation to discuss your case.