When to Hire a Business Attorney for Partner Disputeshttps://toppinslawfirm.com/wp-content/themes/toppins/images/empty/thumbnail.jpg 150 150 sophy sophy https://secure.gravatar.com/avatar/2a04717d7e8d3f7c0c657f34720c1621?s=96&d=mm&r=g
Business disputes are very common. There is absolutely nothing wrong with two or more parties to disagree over an issue or two. It is however very wrong for the two parties to let the disagreement to culminate into destruction of a business which they both worked very hard to set up in the first place. Unfortunately, most business disputes end up destroying a business’ vitality and in some extreme cases, the disputes brings down the company for good.
Partnership disputes are by far the most common type of business dispute experienced in the United States. This a dispute which arises because of lack of agreement between the company’s shareholders and can be caused by a number of things. Some of the most common causes of partner disputes include cash flow problems, misunderstandings in proper profit sharing and other interpersonal disagreements which can happen in any setting.
Although these partner disputes are very common and sometimes inevitable, they can be prevented. Here at Toppins Law Firm, we understand that the leading cause of partner disputes is the lack of proper partnership agreement documents which outline the obligations, roles and general management of a company.
This lack of a partner agreement document comes as a result of business partners registering their companies without the legal counsel of a qualified business attorney. Without a qualified attorney, it is easy for partners to omit very important clauses from their agreement contracts. As such, the chances of a partnership dispute arising early on will be very high. With a written agreement however it is easy for either of the parties to defend or litigate when the need arises.
How to solve a partnership dispute
If you are entangled in a business dispute with you partner and don’t know what to do, here are professional tips on what to do to resolve the dispute amicably without losing your business;
Avoid legal suits in court
If both the parties entangled in the partnership dispute care about the wellbeing of the company, they should cease rushing to court to report the dispute. Irrespective of the magnitude of the matter, the courts should always be the last resort. The first step towards amicably solving partnership disputes is to always hire a business attorney as highlighted below.
Hire a business attorney
If your company doesn’t already have a company attorney, the first thing that you should do is to hire an experienced business attorney to help you with resolving the dispute and restoring calm in the company.
Here are some of the things that a business attorney will do to help solve the partnership dispute;
Determine the root of the dispute
The attorney will listen to both parties and determine the root cause of the partnership disputes. By singling out the cause of the dispute, the attorney will come up with a good strategy to amicably solve the dispute.
Establish how much the dispute has affected the company
The next step is for the attorney to take a look at magnitude of the effects of the dispute. If the dispute has caused any rift between employees of the company then the attorney will advise on the best mechanisms to bring the team back together.
Restructuring the partnership agreement
The next step will be for the attorney to help the shareholders or the involved parties to restructure the partnership agreement document if there was one previously and if there wasn’t one, then the attorney will help the parties to draft one.
A shareholder agreement is a special corporate document which outlines the rights and responsibilities of all the shareholders who own a share of stock or equity in a public or private corporation. The document clearly outlines the duties of each and every shareholder and in a nutshell, the document outlines how the company will be operated.
Although shareholder agreements are not legal requirements for companies, they are very important not only to the proper running company but they help secure the company’s future by preventing potential crisis which might arise. The two parties will then need to sign the new agreement and this will be the reference point whenever a dispute arises.
As earlier on mentioned the courts should be a last resort unless there is some sort of criminal activity involved in the partnership dispute. The best solution to partnerships is however hiring a seasoned business attorney to look into the matter and advise the two parties on the best steps to take to amicably resolve any dispute within the company.
Here at Toppins we offer the best legal services to businesses and companies in Houston and with the help of our well versed business attorneys, we will help you solve any partnership disputes in your company. Give us a call today or drop us an email with the details of your query and we will gladly be of service to you.
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- Employment Law