3 reasons business partners get into disputes

You hope that you and your business partner will be able to run the company amicably, but you also know that disputes are possible. Some of these disputes may be so significant that you have to go your separate ways and close down the business. Others may be relatively minor, but you still need a resolution.

Planning in advance can be helpful, such as drafting an official partnership agreement that touches on dispute resolution tactics. To help, consider these three reasons why disputes occur.

1. Financial inequality

Many disputes revolve around money. This can happen when one person feels that they are not being compensated properly, perhaps because they are receiving 50% of the earnings while doing the majority of the work. There can also be issues when business partners do not contribute equal investments at the beginning of the business.

2. Decision-making issues

Many disputes also revolve around who has the right to make a certain decision. When business partners have overlapping roles, they can run into conflicts where they both want to be in charge of personnel decisions, creative decisions, pricing decisions and much more.

3. Different visions

Similarly, disputes sometimes arise when partners have a very different vision for what they want the business to be. For one, the goal may just be to make as much money as possible, while for the other, the goal is to create the best possible customer experience. Partners sometimes feel that they end up working against one another.

If you are drafting a partnership agreement or navigating a dispute, be sure you understand all of your legal options.