Toronto Financial Litigation Lawyer Helping Clients Facing Partnership Disputes
We understand nobody starts a business partnership anticipating future conflicts, but when a group of people works together, having some kind of dispute is almost inevitable. When it comes to business partnerships, however, allowing a rift among partners to escalate into a courtroom may be an expensive and potentially damaging situation to your company. Our law firm assists businesses facing partnership disputes to obtain a positive outcome and avoid the courtroom when possible.
What Is a Partnership Dispute?
Partnership disputes in a business setting may arise for a number of reasons. When partners disagree over how to run the business or when one of the partners acts in a way that goes against their fiduciary duty, the resulting disputes may end up in court. Partnerships can also be broken down because of conflict among partners, or simply because one of the partners withdraws from the business or passes away.
For these reasons, it is always recommended to initiate a partnership by having a financial litigation lawyer draft up a partnership agreement. A well-drafted partnership agreement can be instrumental in resolving disputes without the need to get the court involved because it clearly outlines the responsibilities and authority of each partner and how disputes should be resolved.
How Can a Partnership Dispute Impact My Business?
The most common consequence of a partnership dispute is the exit of one or more partners, which sometimes makes the partnership inviable. Another potentially negative consequence is financial. Depending on the type of organization you have, each partner may be financially liable for the debts and obligations of the company.
Suing your partner over issues such as negligence, abandonment, breaches of fiduciary duty or any other common partnership dispute reasons is possible if you are looking to recover financial damages caused by your business partner’s actions, but it almost always puts a strain on the business as a whole and may result in an unworkable partnership. If you believe your company has been affected by the actions of a partner, a partnership dispute lawyer can be an invaluable resource to help guide you to the best solution while protecting your bottom line.
Can Partnership Disputes Be Resolved Out of the Courtroom?
Suing a business partner is never a good first step in a partnership dispute. Many disputes can be solved out of the courtroom through negotiation or arbitration. Even if you do decide to hire a partnership dispute lawyer, it may be less stressful and more cost-effective to try the negotiation route before resorting to a lawsuit.
A valuable instrument for resolving disputes can be your partnership agreement. As previously mentioned, it is in the best interests of every partner to agree ahead of time on what is expected from each of them and what steps should be taken in case of disagreements. However, we understand negotiation is not always feasible, so if your partnership dispute is headed to the courtroom, make sure to be working with a reputable partnership dispute lawyer who can help you protect your business and guide you through this often complicated process.
Why Do I Need a Partnership Dispute Lawyer?
Partnership disputes can quickly escalate and become very complex, regardless of the size of your business. There is simply too much at risk for you to try and figure it all out by yourself. What will happen to your business if your partner exits? Will your partnership survive this dispute or will you need to sell or close your business? How will this impact the financial health of your company? A well-versed lawyer can help you with these questions and provide invaluable guidance to navigate this situation and avoid similar ones in the future.
At Financial Litigation, we are highly skilled in negotiating positive outcomes for our clients, de-escalating conflict, and avoiding damages to their business financial health. We work diligently to achieve mutually agreeable solutions, but we will take the case to court and represent our clients whenever needed. If you are dealing with a partnership dispute in your business and need help, reach out to the Financial Litigation Toronto office at 416-769-4107 and schedule a consultation. We are happy to help.