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Fixing a broken business partnership

On Behalf of | Oct 28, 2022 | Business Litigation

It might seem like a dispute is the end of a partnership, but it doesn’t always have to be so. Here are some key ways that real business partnership issues have been resolved in California.

What leads to a partnership dispute?

Human beings are complex animals, and the business realm tends to have high stakes. This leads to a highly reactive combination that may make it hard to maintain healthy, positive relationships.

Everyone wants to be friends with the people they work with, but business is business. The professional world is often markedly competitive and even the friendliest partnerships can turn cut-throat.

Pathways to a solution

You might use mediation to resolve some business disputes. This involves inviting in a neutral third party to hear both sides of the argument and help facilitate a constructive discussion. If you’re too close to the partnership, it might be impossible for you to see where it’s gone wrong. And very few people, even business professionals, are experts and identify their own mistakes.

A buy-out is another possibility that may work for you, but it’s usually only used if the partnership has been damaged beyond repair. If there are other partners in the business willing to buy out one or both of the disputing partners, the business can still carry on without them.

If you don’t want to work with the business partner anymore and don’t want the business to continue either, you can sell out. When it comes to that, it’s often advantageous to find new owners who are willing to buy all the interest that the partners had in the business.

Your other options are:

  • Freeze-out merger
  • Dissolution
  • Bankruptcy
  • Litigation

A business partnership may be a professional arrangement, but at its core, it’s still one between two or more people. And that may inevitably lead to some disputes. No partnership is perfect all the time. It’s good to have some conflict resolution tactics handy so you know what your options are when the relationship starts to go sour.

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