Associate Attorney
Partnership disputes can get ugly, especially if they are allowed to grow out of control. With the right help, you may be able to prevent an intense partnership dispute from tearing apart your business. But that isn’t always possible.
The following are signs that a partnership dispute is best resolved through dissolution over other options:
You Are Considering Business Litigation
If you are considering suing your partner for any reason, you might as well dissolve the partnership altogether, as virtually zero partnerships will survive the process of business litigation. Even if you don’t push to dissolve the partnership, your partner will more than likely do so as soon as you sue them.
With that in mind, business litigation should generally be a last-case scenario after options like mediation and arbitration. Not only are you giving up on your partnership as soon as you start the process, but the process itself will usually take years to resolve.
And even then, whatever you get from it may not be worth that time and effort. That is especially true when dissolving the business without a pending lawsuit is likely to result in less conflict during dissolution.
Your Partner Is in Breach of Contract
The partnership agreement you made when you started the company is a contract. If your partner isn’t fulfilling their side of the agreement, it may be time to walk away from the partnership.
Typically, it is worth your time to try to repair a breach of contract before dissolving the business altogether, especially if the violation isn’t intentional. But if you have already made that attempt and failed, dissolving the partnership will prevent the breach from getting any worse.
Your Partner Is Violating the Law
If your partner is partaking in illegal activity, their actions could be putting you in legal jeopardy due to your partnership contract. As such, escaping the partnership by way of dissolution is the best way to protect yourself from their criminal behavior.
The moment you suspect your partner is doing something illegal, you should contact both a criminal defense and business attorney as soon as possible. You’ll need sound advice at a time like this in order to protect not just yourself from criminal charges but your finances as well. Proceeds from criminal behavior are often forfeit to authorities, and since your finances are mixed with your partner’s, you will lose out.
You Are Socially Incompatible With Your Partner
Despite the severity of the other signs on this list, the issue that ultimately leads to your partnership’s dissolution could be something as simple as not getting along anymore, even if you have for years prior.
It isn’t worth trying to maintain a partnership if you can’t have a discussion with your partner without getting into a fight. And when you spar continually, it affects the morale of other employees and slows down every process in the business. You can probably do better financially by making your own decisions than by arguing every little thing with a partner.
Many people feel that they shouldn’t allow personal problems to get in the way of a professional opportunity. But if you and your partner are already fighting regularly, you are already doing that.
Contact a Business Law Attorney in Dallas, TX, if You Have a Serious Partner Dispute
If you’re in a serious dispute with your partner, there may still be a chance to save your partnership. But you shouldn’t ignore the possibility that the best solution is dissolution. Contact the Sul Lee Law Firm today to discuss your options with a knowledgeable business law lawyer who will help steer you in the right direction for yourself and your business.