3 causes of partnership disputes

Business partnerships are associated with significant benefits, including lower costs for start-ups, reaching out to a new market, better solutions due to the different perspectives, greater borrowing capacity, shared burden and accessible moral support when needed. Accordingly, business owners should choose the right partners to enjoy these benefits.

Nonetheless, disputes between partners may arise in the future, which can cost a business millions of dollars. Below are three common causes for these disagreements.


When partners don’t have an in-depth discussion about the leadership structure of the new company, problems may arise. This aspect may be more straightforward when one party owns a higher percentage, but it can be challenging when the partners are equal, especially when they all want to be the boss.

It may be best for partners to distribute leadership roles. For instance, one may be in charge of finances and the other marketing, but they have an equal voice in management. However, they should communicate before making a crucial decision in their respective roles, as it can affect the company significantly. Failure to do this means that disputes may arise.

Breach of contract

Partnership contracts protect the rights of all parties and ensure that each observes their responsibilities. When one fails to fulfill their duties or violates the rights of the other, a disagreement may occur.

The direction of the company

Of course, partners have different views of how the business should run or grow, which is an advantage. But, without communication or being on the same page, this aspect may be a disadvantage. For instance, if one party refuses to acknowledge another’s ideas or changes the business’s direction without a prior agreement.

Contracts, honesty and communication can make a business partnership work. Without them, expensive disputes may arise. If you are in dispute with your partner, consider seeking some legal guidance to resolve it.


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