Business Lawyers Blog
Business partners, whether as members of an LLC, or Directors or Shareholders within a corporation, often find themselves at loggerheads regarding both short-term and long-term objectives. Unfortunately, when partners don’t see eye to eye, they can compromise the success of their venture and increase the risk of litigation. At Structure Law Group, LLP, we regularly represent partners in various disputes and encourage you to contact an Oregon partnership lawyer to discuss the next steps and provide advice to move forward. Below, we look at some of the most common partnership disputes we help resolve.
Disputes Related to Employee Hiring and Retention
As a partnership grows, if often becomes necessary to hire additional staff. This is a critical moment, and one with real consequences. Often, partners disagree about who is the best hire, as well as whether it’s time to let an employee go. For example, some partners seek to hire family members, while others might not believe they are the right choice. Ideally, these business partners executed a clear, written agreement that addresses these questions. Practically speaking, this is often not the case. In such situations often call for deft handling and a diplomatic approach to achieve a workable compromise or final resolution.
Disputes Over the Direction of the Company
Business partnerships change over time. A once “silent” partner now wants to be routinely consulted for day-to-day matters. The member in a company who promised to contribute labor – that is to say, provide services to the Company – rather than investing money stops working until they receive fair compensation. One partner wants to keep growing the company while the other wants to sell out and move on. The list of ways business partners can find to disagree is almost endless. Over time, however, partners can diverge in their direction for the business. These fundamental disputes wear thin the fabric of a partnership and often lead to conflict – and potentially litigation – if not properly mediated..
Breach of a Fiduciary Duty in Oregon
Some find themselves with no choice, but to sue their business partner. Such cases often involve. Breaches of fiduciary duty. In Oregon
Business partners owe certain, enhanced legal obligations – or duties – to one another by virtue of being in business together. These duties, including a duties of care and loyalty. Duties of care usually involve a business owner engaging in some level of misconduct, through there could be other examples that would satisfy the standard. The duty of loyalty is easier illuminated through an example. A business partner who owns a coffee shop with another partner then takes an ownership interest in a coffee shop across the street. It’s not wrongful for anyone to own a coffee shop, but this business partner is working for a competitor and thus violates the duty of loyalty.
There are certain business partnerships where one side dominates another, usually through force of personality rather than as a result of a written agreement. In such cases, breaches of loyalty on the part of the more dominating partner – who has grown use to having things run their way – are common place. To protect your business, contact our firm to understand your legal rights and how to exercise them.
Dissolution
Disagreements are certain to crop up when a partnership winds up its business. Some areas of dispute include:
- When to sell and who to sell to
- The value or division of company assets
- How to allocate debts left over from the business
- Whether or not an asset belongs to the company
- Whether some partners want to carry on the business in some form
Contact Structure Law Group for Guidance on Partnership Disputes
Partnership disputes can escalate quickly, placing both the business and the partners’ investments at risk. Early legal guidance can often help clarify rights, evaluate options, and resolve disagreements before they grow into costly litigation. Whether a dispute involves fiduciary duties, management decisions, profit distributions, or the possible dissolution of a partnership, experienced counsel can help protect the interests of the business and its owners.
The Oregon business attorneys at Structure Law Group LLP represent partners and business owners in a wide range of partnership disputes. Our team works with clients to assess the legal issues involved, develop practical solutions, and, when necessary, advocate for their interests in litigation.
If a partnership dispute is affecting a business or appears likely to arise, contacting Structure Law Group can help provide clarity and direction. Schedule a confidential consultation with our Oregon business attorneys to discuss the situation and explore the best path forward.