subject: 7 Ways To Avoid Partnership Disputes [print this page] Since partnership business involves two or more owners, disputes and disagreements may happen especially in the process of decision-making and distribution of profits. To avoid such pitfalls, corporate lawyers believe that company owners should draft a written partnership agreement that will provide solutions even before problems would arise.
GUIDELINES IN AVOIDING AND RESOLVING PARTNERSHIP DISPUTES
1.For starters, hiring lawyers is highly advisable.
While owners can draft their own partnership agreement, it would be better if they would hire a corporate lawyer to avoid legal loopholes that will affect the company.
One of the most common mistakes of partners is not including the dissolution process in the partnership agreement. By drafting a dissolution contract, people will know their shares and obligations after the business assets have been liquidated.
2.Keep a small number of partners to make it manageable, but large enough to meet the companys goal.
In partnership business, more owners are not always ideal as it may result to management headaches especially in the process of decision-making.
The rule of thumb is that every partner should have a role and specific duties within the company. Overlapping roles are a sign that the number of partners is too large.
3.Consider the suggestions of some key employees.
Partners should ask key employees such as supervisors and managers their opinion and suggestion to resolve a certain problem. These key employees, who are in the frontline of the business operation, may provide important suggestions which can be adopted by the company.
4.Promote a two-way communication.
Communication is the best tool in resolving disputes that requires a person to have bigger ears and smaller mouth. Also, open communication with other partners may allow them to realize that compromises are important in partnership business.
According to business consultants, a two-way communication is also a sign that every opinion and suggestion of partners is given importance, making them feel they are important part of their company.
5.Hire a neutral third party.
By hiring mediators, partners can resolve internal disputes and avoid costly litigation which may drag on for years. Another advantage of hiring a neutral third party is that the operation of a business will not be seriously affected in the event of a dispute.
6.Make a truce.
This means that every partner should promise he would not alter the business operation or raid the companys checking account. While disputes will make people feel overly emotional, people should still be professional and pragmatic to make rational decisions and actions.
7.Update the business plan.
After resolving a dispute, the next move is to update the business and strategic plan to avoid another disagreement.
