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Tips and Advice in Avoiding Disputes Between Business Partners


This article has been submitted by Carys Murphy, Solicitor, Business Legal services at Slater and Gordon.

Going into business with a partner can be a great way to work. These types of collaborations are common in many businesses, particularly start-ups.

Unfortunately, disputes can arise as business partners are often relatives or close friends and it can become a very stressful situation.

argument-238529_960_720You can take steps to try and avoid a dispute, but it requires a reasonable degree of effort and an investment of time and money.

Our top tips to avoid disputes

  1. Written Agreement – First, make sure you have a written agreement in place. It should clearly define the following items:
  • Who has control and how much;
  • Each partner’s role;
  • Duties and obligations;
  • Capital contributions
  • Compensation and distributions;
  • What procedures the business will adopt for making decisions;
  • Worst-case scenarios When and how the relationship between the partners can be terminated.

This agreement should be in writing and should address the items in as much detail as possible. Disputes often arise with agreements when they are ambiguous.

  1. Seek legal advice at the outset

A solicitor can assist you with preparing the partnership agreement. Many individuals will forego having an agreement or prepare one themselves. Important details can be missed out which can cause significant problems at a later stage.

Although you may think that obtaining legal advice is expensive, the money you would spend on initial advice outweighs the money if a dispute arises.. Spend a little money and time now to get it right, and you will avoid headaches in the future.

  1. Discuss the dispute

Discuss the matter with your partner and make an effort to focus on sensible solutions. A good faith discussion may prevent protracted litigation.

  1. Consider hiring a mediator

Consider hiring a neutral mediator to help you resolve any disputes. In fact, many agreements contain provisions that require mediation to resolve disputes.

  1. Contact a lawyer

If you and your partner simply cannot agree, contact a lawyer right away. The sooner you get legal help, the better.

The team have a wealth of experience in both supporting businesses in preventing partner disputes and in assisting in there resolution. If you would like to speak to a member of our experienced Dispute Resolution team call Slater and Gordon Lawyers in our Cardiff office on 0292 192 1818 or contact us online.


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