Avoiding Legal Actions Between Partners

A partnership is one of the easiest businesses to establish. Start-up costs tend to be lower than for many other types of business structures, such as an LLC or corporation. Partners tend to have more access to capital and greater borrowing capacity because they can fund their business with their personal assets. However, they do risk losing their business and personal assets if the partnership fails, like sole proprietors.

In a rush to get their business started, the partners may put off establishing an partnership agreement. Or, perhaps the one that they have in place is missing provisions that, as the partnership matures, may create areas of difficulty or conflict. Partner disputes often arise in partnership structures, but with a reasonable degree of effort, you can resolve these disputes without seeking assistance from California courts.

How Controlling is the Partnership Agreement When Disputes Between Partners Arise?

Before creating a partnership, the partners should have a written partnership agreement that outlines the purpose of the partnership, its management and capital structure, and provisions for the non-judicial resolution of disputes. If the agreement contains a dispute resolution clause, the partners must engage in the process contained in the agreement to reach a resolution to any conflict that arises.

Is it Too Late to Establish a Partnership Agreement?

A dispute may arise before you have an opportunity to create a partnership agreement. In these circumstances, you should retain the services of a business attorney who can help you draft a written agreement that contains a dispute resolution clause that you can use to resolve the current dispute. If there is an existing agreement without a dispute resolution clause, you can modify the partnership or operating agreement to include one.

How can We Help You Solve Your Partnership Dispute Out of Court?

When partnership disputes arise, the business lawyers at JGPC law act more as business consultants rather than lawyers. If you cannot resolve the dispute, rather than going to court we will try using mediation and arbitration to help you resolve the dispute. If we can’t help you solve your dispute, dissolving the partnership may be necessary, but we can also perform that process out of court.

Lastly, by building early intervention systems, the business lawyers at JGPC can proactively prevent disputes from arising by documenting the partners’ roles and responsibilities, holding structured meetings between the partners with set agendas and transparent communications, and setting budgetary goals and reviews, among many other available measures.

If you are a business owner or entrepreneur looking for legal assistance, we can help you today. JGPC law can help business partners avoid disputes by creating structured performance evaluation processes and standardized documentation, and/or holding constructive meetings or mediation to resolve disputes.

JGPC Business Law serves businesses in Fremont, Hayward, Oakland, Tracy, Manteca, and San Ramon from our Pleasanton and Livermore California offices. Visit us online to request an appointment today or call us at (925) 463-9600.