Why a Written Partnership Agreement Is Essential to Avoid a Business Partnership Dispute

When setting up a brand new business partnership, the last thing you will be considering is the possibility of a dispute arising in the future.

But it is often the case that partners will blame each other if a business fails to prosper, and this will inevitably lead to a partnership dispute. Whether it's a partnership of solicitors, accountants, or even GPs, it is therefore essential for all partners to have a written partnership agreement drawn up by a solicitor who is experienced in this field.

Although a written partnership agreement is not a legal requirement, it is essential for all involved to protect themselves from any future business partnership dispute or legal action. You will naturally not expect any problems of this kind when the business is starting, but none of us can see into the future, and it is only sensible that both you and your partners know where they stand. But what should you include in you partners agreement.

It should, of course, be an agreement on which all involved are decided. The business will not run smoothly if any of the partners are unhappy with the agreement. But there will probably need to be an element of compromise from all partners, and the way that the partners work together when drawing up a partnership agreement will be a good indication of the way they are willing to work together in the future, through good times and bad.

Above all, a written partnership agreement is there to protect and safeguard the partners. Having a written and legal document will set out exactly where each of the partners stands, their share of the investment and their responsibilities. Any business partnership dispute which may occur in the future can be largely avoided if the terms of the agreement are adhered to.

Of course, the written partners agreement need not be set in stone. As your business grows, individual circumstances will change, and things that were not thought about at the time of the agreement being drawn up may have to be included. This is just one of the benefits of a written agreement. It is flexible, and can be amended at any time, but it is the most sensible course of action to make sure that all partners' responsibilities and roles are set out clearly, to avoid future misunderstandings or business partnership dispute which would have arisen if any partner were not clear about what was expected of them, and what they expect from each other.

If you are going through a partnership dispute, contact Bonallack & Bishop. They are a firm of business partnership dispute lawyers. Senior Partner Tim Bishop is responsible for all major strategic decisions. The firm has grown by 1000% in 13 years.

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Falling Out With Your Business Partners - Is a Formal Partnership Dispute Inevitable?

Even if a business partnership started out on the best of terms with a positive relationship. Things happen over time which can cause the partnership to end on bad terms. A dispute of this kind can be fairly time consuming and stressful.

If a business partnership dispute gets to the point where the partner simply cannot come to an agreement between themselves - one of the partners has seriously betrayed the other's trust or acted against the partnership's interests - it may be that the best and only option is to end the partnership entirely.

However, the process of ending a partnership because of a business partnership dispute is nowhere near as easy as many people think. Everything is not simply split in half for each partner. The outcome and legal situation is highly dependent on several factors. For example, if one or more partners want to leave the business whilst the others remain, you will need to consider whether or not there is a written partnership agreement is in place, and if so what are the terms - the alternative being that the business relationship is governed by the Partnership Act.

Unfortunately, there is a high correlation between any business partnership dispute and the failure of the business. This is because it is hard to smoothly run a business when there is dispute in the partners, or if the partners are not exactly seeing eye-to-eye, and may even refuse to work together in any capacity, until the issue has been resolved.

Many complications can arise in these sort of disputes. One partner may want to end the relationship and even the business itself, whilst another may want to continue to keep the business open. Third parties may be brought into the equation to try and come to a solution through either mediation or arbitration. If a solution can't be found, the next step is usually trying to reach a resolution through the courts.

Sometimes litigation is the only option if all other avenues have been exhausted. However, if there is a business partnership dispute in which one or both of the partners thinks that the end of the partnership is inevitable then it may prove impossible to rescue the relationship.

Dissolution of the partnership may lead to the sale or closure of the business; make sure that this is done legally and correctly, and try not to be in a hurry to sell, as it's likely that you won't get the best deal possible.

If you and your partner are currently having a business partnership dispute and need legal advice, it is absolutely essential that you receive the best and specialist legal advice available so that you can analyse all of the options available. If your partnership looks like it is going to end, along with the business, be sure to take the appropriate steps and get legal advice as early as possible.

Are you going through a partnership dispute? Get in touch with Bonallack & Bishop on 01722 422300 -Solicitors who specialise in business partnership dispute advice.

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Should My Business Agree To Arbitrate a Dispute?

The decision of a business include an arbitration provision in a contract or to sign one that includes it should be made in connection with consultation with counsel as there are significant aspects for the business to consider that are relevant and critical to its decision making process. Depending on the structure of the business, making this decision without consulting the business' attorney may even expose the manager(s) to liability for violating their duties to the business and/or its shareholders or members.

Arbitration is akin to conducting a private trial out of court. There are no judges or juries, only an arbitrator that the parties have selected. The rules, if any, are generally more relaxed than in court, but there are some drawbacks to consider. The parties can select a particular organization and its rules to govern their arbitration, however, the cost and time to arbitrate can actually exceed the cost and time of litigating in court. Also, the lack of a defined procedural structure, like those applicable to disputes in a court, can actually inhibit the efficient, impartial, and fair adjudication of claims. However, the nature of the dispute and the method by which the parties operate their business may benefit from by keeping the dispute private, limiting appeals of disputes, and reducing the chance of precedents that may impact the future operations of a business. Clearly, each situation is unique and must be carefully analyzed and considered in light of the applicable circumstances.

The most appropriate method for a business to make an educated and informed decision about whether to sign a contract that requires arbitration of all or certain disputes or to include such a provision in a contract is to fully discuss the benefits and drawbacks with qualified legal counsel. If your business believes it is best served to save that cost by making the decision alone, then consider that your business will likely spend much more later to litigate or defend the enforceability and validity of a contractual arbitration provision.

By way of guidance, if you don't already have qualified legal counsel for your business, contact your State's Bar Referral Program, such as the Florida Bar, which can be found at http://www.flabar.org. Certain States recognize and certify attorneys for their expertise and experience in particular areas of the law. For example, Florida Bar Board Certified Business Litigation attorneys are experts in business litigation and can provide competent and comprehensive advice regarding whether a particular arbitration provision is appropriate for your business and its circumstances.

This article is not meant to provide legal advice or to form an attorney-client relationship; it is meant only to provide general information about this topic. To view videos and articles about this and other business law related topics, please visit my website at http://www.davidsteinfeld.com/

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What Exactly Is Alternative Dispute Resolution?

Legal Dictionary

ADR - Function: abbreviation; alternative dispute resolution

Merriam-Webster's Dictionary of Law, © 1996 Merriam-Webster, Inc.

It used to be that things were fairly simple. If you had a legal dispute, you went to a local attorney to find out your rights. You and your attorney reviewed the law and the facts and you took your best shot in court. The idea was that the proper use of the evidence, a good attorney and a court of law would sort it out and justice would be done.

Then the court dockets became clogged. Good attorneys became too costly for the average person. Your day in court became a half day squeezed in between nine other cases on the docket. Your attorney tells you to try mediation or arbitration to save on costs; or the court orders you to mediation before you can appear before the judge. Worse, you go before a judge for the fourth time because your ex didn't bring the kids back on time and the judge orders you to see a parenting coordinator. A parenting what?

This article discusses some of the popular alternative dispute solutions being used by attorneys, the courts, businesses and private individuals. There is no "right" model for everyone. Some solutions are permanent, some are flexible, some you need an attorney and many you can do yourself.

ARBITRATION

Arbitration is not a new concept and it is not just for sports teams. It has been used by state agencies for many years with varying degrees of success. Corporations began turning to it more than 100 years ago, and merchants have been using it all over the world for thousands of years.It is gaining popularity today because it reduces costs, is faster and less formal than court proceedings, it reduces the need for litigation attorneys, and you get a say in who hears your case. Some arbitration consist of a panel of three arbitrators and others have only one. Often, you can choose from a list of arbitrators or a recommendation by an attorney or associate.

Probably the most common place you find arbitration in the private sector in Florida is condo associations and HOAs, labor, or contract disputes. Arbitration can be binding or non-binding and many contracts have arbitration clauses that must be satisfied before traditional litigation can occur.

Arbitration is the most formal of the modern ADR methods for resolving disputes. For example, if you decide to have one arbitrator, that individual will hold a hearing just as if you went to a regular court. However, the rules in arbitration are very different than those you may have seen in a courtroom, while still providing you with a formal hearing process. Attorneys are welcome, but not required. However, because arbitration can be binding, and your appeal options may be limited, attorneys are strongly recommended.

There are several benefits to arbitrating your dispute. First, as previously mentioned, you have a say in who hears your case rather than being randomly assigned by a judge. Second, arbitration shortens the time frame, for your case. It allows you to schedule your case rather than having to work around the court's calendar. Third, the procedures, formalities, rules of evidence and the conduct of the hearing are all designed to be more relaxed than a court room. Next, when you schedule your witnesses you don't have to repeatedly inconvenience them if court is running behind. If your witness takes a day off, a good arbitrator will try to schedule the time to make sure they get into the hearing. Another benefit is getting a decision quickly. Florida law requires that any court-referred arbitration render a decision within 10 days after the hearing unless there are special circumstances.

PARENTING COORDINATION

Next in formality is parenting coordination. This is a specialized process that is fairly new to Florida courts and, I hope a great idea for other jurisdictions. Everyone has heard of the family court cases that keep going back to court over and over again. Parenting coordinators are specially trained individuals that are assigned to tough cases to help parents and the courts create working solutions to ongoing parenting issues. Right now, almost all parenting coordination in Florida is done by court order and the parties have to be able to pay for the services. Attorneys are not permitted in the actual session, but the parties continue to have access to their attorney.

There are several benefits to parenting coordination that are not available to most family court cases. First, the Parenting Coordinator ("PC") gets to know you and your unique family situation and issues over a longer period of time. There is no magic formula to make people get along better after a break up or divorce, but the PC can use many forms of dispute resolution to assist struggling families to comply with court orders and try to keep the process focused on the best interest of the children, as determined by the court.

It is not an easy process, but it has proven very effective since the start of the program just a few years ago. It uses traditional methods, court support, mediation, collaborative efforts, facilitation, and other resources to try to keep the family on track.

MEDIATION

Mediation is being used in the vast majority of cases today because it is so effective and you get to help create the agreement rather than being ordered by a judge to comply with a decision. Mediators work with you to help you find solutions to your issues on your terms and according to your schedule. The concept is simple: no judge will ever know you or your situation better than you know it. Having a trained mediator helps you negotiate what you believe is the right solution for you, for your family, for your situation, for your outcomes. Mediation can also save thousands of dollars in costly litigation and months or years of time completing your case. Mediation is not the same as compromise. It is a unique set of solutions designed by you, agreed to by you, in cooperation with your opponent without having to drag each other through lengthy litigation, hard feelings and "traditional" solutions that just don't work for your life. It can be court ordered, or it can be done privately either before or after filing a lawsuit, and can be done with or without an attorney. For example, many people today are using "compassionate" divorce mediation techniques that work with couples contemplating divorce without the hard feelings and costs of traditional divorce. A growing trend is couples seeking mediators before seeking attorneys, although the "jury is still out" about whether this will work in the long run. "Collaborative divorces" are also increasing in frequency, where the attorneys act as mediator and attorney, but only time will tell if this model will hold up to ethical and conflict issues.

FACILITATION

Finally, there is facilitation. This is often used in corporate settings or where several people need to work together to brainstorm ideas, solutions or projects. A good model for facilitation is a moderated brainstorming session. These programs are exciting, exhilarating, creative and have lasting effects on all participants. They open the door to tremendous growth, and facilitation is an outstanding morale booster for companies seeking to improve communications and productivity across departments or platforms. In a family setting it can be used to incorporate extended families and caregivers, and to promote cooperation and joint problem solving,

I hope this helps you better understand some of the alternative dispute solutions available to you. If you would like more information, you can contact Lyndy at her blog at Collaborative Solutions, P.A.

Lyndy is a regular contributing author for several websites and blogs.

She is new to Ezine but her submissions include articles on books, book reviews, recipes, law, arbitration, mediation, gourmet foods, coffee and chocolate and politics. She is an attorney in Florida and New York and she is an arbitrator, mediator and facilitator for the courts and private companies. You can read some of her other articles at Collaborative Solutions, P.A.

Lyndy writes the "Aspirations" column for self help, personal and professional growth and she interviews and features many prominent authors and motivational authors and speakers. She is also a main contributing author to the columns "Legal Ease" for law students and professionals and "Board Room" for business, restructuring and business promotion. Her legal blog posts articles and resources for all types of alternative dispute resolutions including parenting coordination, mediation, facilitation and arbitration.

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What Should You Do In a Franchise Dispute?

Irrelevant of how slick a franchise operation is put together, it is inevitable that some disagreements between the parties involved will arise.

In this case it is prudent to consider the situation carefully, so as to resolve it in the best possible way and shorten the process as much as possible.

A franchise dispute could arise for all manner of different reasons. Thankfully such disputes are reasonably rare but they can crop up if changes should occur or if some promised by either the franchisor or the franchisee isn't done. For example comprehensive training may be offered as part of the franchise deal. If the franchisee should sign up for the deal and not receive the training as promised, they would have a case to bring against the franchisor.

Of course any experienced franchising solicitor will know that the last thing anyone would want is to take legal action. In most cases they will recommend mediation in an attempt to resolve the issue. But even if legal action is not taken (and in many cases it won't be) it is still best to rely on the services of a franchising solicitor in order to resolve the matter with mediation. Emotions are very likely to be involved between the franchisee and the franchisor. Having solicitors acting on behalf of both parties means that the situation will often be resolved more respectably and more quickly than it would be otherwise.

If you should ever find yourself in this situation, the first step would be to get professional advice on the franchise dispute. Don't opt for the first solicitor you find - ensure you locate a franchising solicitor who has extensive experience of dealing with such cases. They will be able to use their experience and knowledge to help you resolve your own dispute in the fastest time possible, while still being able to maintain a good relationship overall with the franchisor.

The good news is that many franchise relationships experience nothing more than the odd bump in the road. Most problems may be able to be sorted out between the two parties with no legal mediation required. But it is heartening to know that if you should find yourself in a situation where you don't know what to do next to preserve your business, help is at hand. Providing you know you have a solicitor close at hand that you can call on, you will be able to take a lot of the stress out of the situation.

Whether you are buying or selling a franchise, or involved in a franchise dispute, you are going to need the help of a specialist franchising solicitor. Contact the franchising specialists at Bonallack & Bishop first.

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The Family Business and The Business Partnership Dispute

Your family is the most precious thing in your life. Starting a business with members of your family can be full of benefits, but also full of potential problems.

Appointing a specialist solicitor who is experienced in dealing with business will help you to avoid a future partnership dispute. No members of the family will want relations to be soured by business disputes.

No matter how much love is in your family, everyone involved will be protected from any possible business partnership dispute by having a proper, legal partnership agreement drawn up. Whatever business you start, your solicitor, bank manager and accountant will be your best friends, and it is essential to have regular meetings with them, and among the family partners.

It is also essential to head off any problems which you can see approaching in the future. Going into business with someone outside of your family can be stressful enough, but working with family members has its own perils. It is essential to remember that nothing can replace your family, and no-one in the family will want it driven apart by a family business partnership dispute.

An initial discussion is vital before starting a family business. Which members of the family should be involved, and what skills and experience can they bring to the new enterprise? Are all family members able to fulfill their roles? It is a big mistake to employ members of the family just because they are related to you - having someone outside the family working in the business will provide a clear and objective view of the overall running of your company.

There will naturally be disagreements in any family business, and it is best to keep these in mind in both good times and bad, to avoid any family business partnership disputes. By pledging to work together, and see through any problems which may occur, a family business can be successful. The initial partnership agreement must be thought about before anything else, and should clearly outline the roles and responsibilities of all involved. Ignoring these factors at the beginning will surely lead to a family business partnership dispute and upset a harmonious family.

A new business can bring together a family and strengthen their bonds, but only if a specialist partnership solicitor is engaged at the start, and all members of the family involved are clear about their roles and responsibilities, to avoid a family business partnership dispute.

Are you in need of a Solicitor in Salisbury for expert legal advice on your partner dispute? Contact Bonallack & Bishop - Salisbury Solicitors specialising in advice on your business partnership dispute.

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How To Continue After A Business Partnership Dispute

The course of life never runs smoothly, and this is especially true in business partnerships.

There is not only the business itself to run, but the contributions and personal concerns of partners to be considered on top of everything else. At some point, disagreements or differences of opinion are bound to occur, but partnership disputes do not necessarily have to lead to a business partnership dissolution and the end of the business.

As well as the partners and employees, there are other people who should be kept in contact and up to date with the business, such as the solicitors who helped to draw up the original partnership agreement, bank manager and accountant. Mediation may well be the best option if partnership disputes does occur, and your solicitors are the best people to talk to, if partners have reached an impasse. A meeting with the company's solicitors is sure to bring up solutions that the partners may not have thought of by themselves.

One partner throwing a tantrum and deciding to walk away does no-one any good, and could force the business to fail. When partnership disputes do occur, solicitors specializing in this area will be able to advise on both legal and financial matters. Can one partner buy the other out? Can the agreement be restructured to mutual satisfaction? Where partnership disputes occur, there are many options to resolve them, without automatically leading to a business partnership dissolution.

It is a wise course of action, if a partnership dispute does occur, to draw up a list of the positive things about the business. As a proportion of the businesses plusses and minuses, the partnership dispute may, in this light, be seen as very minor. Partners may feel that they cannot work together any more, and one will naturally feel more than the other that a partnership dissolution is the best course. This may turn out to be the case in some cases, but it should not be rushed into. If discussion between partners, and a meeting with the company's solicitors, don't resolve the situation, then a partnership dissolution may be the only alternative for all concerned. But there is a solution for every problem, and it is worth considering all the alternatives, for the sake of the business and its customers. After all the hard work involved in trying to grow the business, it is worth doing everything you can to put your differences behind you.

Bonallack & Bishop are Solicitors in Salisbury whom specialise in business partnership disputes. If you want further information then contact their business partnership disputes solicitors today. Senior Partner Tim Bishop is responsible for all major strategic decisions. The firm has grown by 1000% in 13 years.

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