What are your options for resolving a partnership dispute?

If you co-own a California business, success is your ultimate goal. However, personalities sometimes clash and professional issues might arise. Fortunately, if you and your business partner run into a dispute, you have several options for resolving it.

Mediation

Mediation is often the best way to resolve a partnership dispute. It involves using a neutral third party to help the parties come to a conclusion that helps you move past the issue of contention. Mediators are there to help you discuss your concerns and compromise while seeing one another’s point of view. Mediation can help resolve things faster and let you avoid going to court, which typically leads to a long, drawn-out battle.

Buy-out

In the event that mediation doesn’t work because the situation is irreparable, a buy-out might be the solution. One partner can buy out the other’s interests. When this happens, the partner who leaves is given a portion of the total value of the company.

Partnership agreement

If you signed a partnership agreement at the time when you formed the company, you’re in good shape. It’s a legal document that explains your options if a dispute should arise in the future. The agreement states each partner’s role, responsibilities and what happens with the business if the partnership needs to be dissolved and how that happens.

Litigation

In some cases, the only way to resolve a partnership dispute is through civil litigation. This may be the only logical solution if the problem involves fraud or some other type of violation or misconduct. If one partner was wronged by another, they could be compensated if the case goes in their favor.

Depending on the nature of the situation, one of these solutions may be better than the others.