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Clear partnership agreements are critical

| Aug 6, 2020 | Partnership Law

The forming of a business partnership can feel like a very straightforward kind of crossroads. On one side, you wait for a different opportunity. On the other, you accept the new adventure in front of you, working alongside someone you know well and trust. It can feel like an obvious choice and like the best of times are upon you, with a friendship blossoming and forging into something greater.

And if that feels like the best of times, a dispute can feel like the worst. There are a number of reasons why a business partnership can start to hit shaky ground, but when it does, there is a common first step: peering at the partnership agreement.

A partnership agreement covers a lot of ground

The agreement should go over individual responsibilities and liabilities, and provide a framework for those involved. In covering that ground, the partners are allowed to have their say, so that the documents contained represent their best interests. Putting their interests within the text can be crucial, as otherwise, a dispute may make its way to court. Instead of a personalized approach, the partners will face the court’s brand of justice, abiding by state statutes.

The excitement of a business partnership may feel weighed down by the comprehensive and potentially exhaustive length of a partnership agreement, but those instructions could in fact be what gives the partnership longevity.

If the dispute ends up consuming the partnership

Even minor disagreements can make the vision of a partnership feel rudderless. After all, these disagreements can stem from a single event or may have been building over time, letting resentment steep. If a partnership becomes too far gone in turmoil, it may be the wish to transition and exit the entire arrangement. Now imagine the bitterness that would accompany this if there was no guidance whatsoever.

While disputes may share commonalities, every case is different. Whether you need help drafting up a partnership agreement, or find yourself in the middle of a dispute that the original agreement doesn’t seem to assist with, seeking further counsel can provide guidance during a troubling time. Whether the partnership has a future or it seeks to disband, doing so with a level of professionalism can do wonders.