Common Types of Business Ownership Disputes
Starting a business is an exciting venture, but it isn’t without its downsides. Disputes will emerge in the course of doing business, and you’ll need ways to resolve those disputes so that they don’t harm your bottom line. Understanding common types of business disputes can help keep your business running smoothly. In this article, the Dayton, OH, business litigation attorneys at Kohl & Cook Law Firm, LLC will discuss common types of business ownership disputes.
Disagreements over finances
Financial issues tend to be a primary source of conflict between business partners. Disputes will occur over how to allocate profits, invest in the company, and handle expenses. One partner could feel as though the other is spending too much on items they don’t particularly value and not investing enough profit back into the business.
Problems concerning the division of responsibilities
Conflicts often arise over the division of responsibilities. Each partner might have a different idea about their role within the context of the business. One partner could feel as though they’re doing more of the heavy lifting than the other partner. To prevent this, the partners should clearly define their roles at the outset.
Conflicts of interest
Decision-making is another key area that gives rise to disputes between partners. Each partner may have a different vision for the company’s future or disagree on key decisions being made on a daily basis. Without a clear decision-making procedure, such disagreements can stall the growth of your business and create tension.
Exit strategy disputes
Partners often overlook the need to consider exit strategies when starting their business. However, issues can arise if one partner wants to leave the business or if there are plans to sell or dissolve the company. By not having a clear exit strategy, the business ensures that there will be considerable disputes when one partner tries to leave. Such situations can result in broadscale confusion and conflict.
Conflicts of interest
A conflict of interest occurs when partners focus on things that help themselves at the expense of the business. For example, one partner might start a competing business or side job that takes up a considerable amount of their time. Setting clear policies about outside activities is important. So is talking honestly about your individual goals.
The bottom line
Business owner partnership disputes take on many forms, impede growth, and slow down your daily activities. By addressing these problems early in the process, business partners can maintain a healthy and productive business relationship.
Talk to a Dayton, OH, Business Partnership Attorney Today
Resolving disputes that emerge between partners takes a forward-focused mindset. You want to handle these problems before they occur. Kohl & Cook Law Firm, LLC can help you manage these problems before they turn into major disputes. Call our Columbus general counsel lawyers today to learn more.
