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Lack of trust can cause business partner disputes

On Behalf of | Jul 25, 2024 | Business Law |

A business partner dispute can spell the end of that partnership and perhaps the end of the business itself. Even if the company has otherwise been successful, serious disagreements between the partners may be too much to overcome. They may have to divide the company’s assets and go their separate ways, or one partner may look to stay with the company while the other exits.

Because these disputes can have such a dramatic impact on the future of the company, it’s important to know why they happen. One of the main reasons is when there is a lack of trust between the partners.

Financial conflicts

For example, if the partners don’t trust each other, they may have questions about how the other person is using the business’s finances. Are they spending money appropriately? Are they taking all the right steps before making financial decisions on the company’s behalf?

Day-to-day operations

A lack of trust can also just affect the day-to-day operations at the company. The partners may not trust each other to make hiring and firing decisions. They may feel that they are working against each other, with different visions for what the company should be. Each partner may have significant concerns over the long-term future of the relationship, perhaps wondering if the other person is planning to unexpectedly leave the business. 

These are just two examples of potential disputes, but the core issue is still the same: The business partners do not trust each other. This breakdown could lead to the end of the partnership agreement, the sale of the business, the division of business assets and much more. Both partners need to know what legal steps to take at this time.

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