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Partnership Disputes

Disagreements within business partnerships can occur in a wide range of circumstances and can stem from a variety of issues.

It is crucial to have a clear understanding of your rights and responsibilities in order to effectively resolve these disputes and maintain the integrity of the business assets.

In most cases, partnerships are intentionally formed when two or more individuals, companies, or trusts agree to share profits and losses. Partnerships are commonly formed by written agreement, but may also be made unintentionally when parties are in business together. While everyone involved in a partnership doesn’t need to have roles in running the business, all partners share the responsibilities, benefits, and risks involved in running the business, and partners bear joint and several liability for the partnership.

Therefore, when partnership disputes arise, it is important they are resolved quickly and cost-effectively, as any disruption to the business of the partnership will have a direct result on both partners.

Partnership conflicts can quickly become highly disruptive to the business and overwhelming for each party. If left unresolved, they have the potential to bring and end to the partnership and incur liability for individual partners. To minimise any negative consequences, you should obtain legal advice as soon as possible.

Our partnership lawyers often provide guidance on various disputes including

– Unauthorised access to confidential information

– Misuse of company resources

– Breach of fiduciary duty

– Failure to comply with workplace safety protocols

– A partner earning undisclosed profits

– If a partner is participating in a secret action that benefits themselves or someone else, without revealing it beforehand

– The use of company assets and funds for personal gain by a partner can lead to financial losses for the business

– When one partner fails to meet expectations or does not perform as expected

– Disagreements between partners about how the business should be run

– Inappropriate or disproportionate distributions profit

– How to continue the business of a partnership when a member dies

– Issues pertaining to regulation, such as legal, taxation, or accounting matters

We can assist in resolving your partnership dispute

At PCL Lawyers, it is our goal to achieve a swift resolution that aligns with your desired objectives. We carefully consider your ideal outcome and strive to achieve it.

Our partnership lawyers possess expertise in litigation processes, and with planning and consideration of your case and its surrounding facts. We assess your circumstances initially and work out a strategy to deal with the issues to achieve the best commercially sound outcome for you.

Assisting in the resolution of your partnership disagreement we can

  • Inform you of your rights and responsibilities within the partnership as outlined in the partnership agreement or at common law
  • Help develop a strategy and options to resolve the dispute
  • Give you guidance on likely outcomes and timeframes
  • Act as your advocate in discussions and negotiations, including alternative dispute resolution methods such as mediation or arbitration
  • Represent you in any legal proceedings
  • Draft deeds of settlement
  • Handle the departure of a partner from the partnership or dissolving the partnership.
  • Create a well-crafted partnership agreement to prevent potential disagreements in the future.

Oftentimes, individuals prioritise short-term gains and overlook the potential long-term ramifications. Without proper legal guidance, you may end up making decisions that result in lost revenue and missed opportunities.

While some disputes may be resolved through correspondence alone, firm negotiation and legal proceedings may be necessary in other situations. Whether you are initiating a business partnership or considering its dissolution, it is crucial to obtain legal advice. The long-term impacts of conducting business as a partnership may not be immediately obvious, and our lawyers can advise you on the ideal structure for your business.

What is the process for resolving disputes?

Generally, partnerships operate in accordance with a document known as a partnership agreement. It is common practice for a partnership agreement to contain clauses setting out how disputes must be resolved, which usually requires the parties undergo a method of alternative dispute resolution like mediation.

Where that is unsuccessful, it may become necessary to commence court proceedings to resolve the dispute.

Where there is no partnership agreement, the common law of the relevant state or territory govern the relationship. If that is the case, our partnership lawyers can advise you on how the common law of all Australian jurisdictions will apply to your partnership.

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