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Partnership Disputes in Sydney

Business partnership disputes are typically challenging for the parties involved. The relationship needs to be a close one if the business is to function effectively. Hence, resolving a partnership dispute quickly is to be preferred to preserve the value of the business asset.

A business partnership can be between two or more individuals, companies, or company/trusts. A partnership dispute is to be distinguished from a shareholder dispute (which is when there is a company above the partnership entities with a shareholder agreement in place).

Business partners are generally deemed to be jointly and severally liable for the partnership, which will include such things as tax and superannuation liability, as well other business debts it thus highly advantageous if the issues are resolved as quickly as possible.

Some of the types of disputes about which our partnership lawyers in Sydney advise are:

  • Different Views – Partners may have different ideas about the direction of the business or conflicting ideas on how the business should function.
  • Exit of a partner – A partner may leave by way of resignation, expulsion or death. This can create tension or even just be challenging for the remaining/surviving partners in figuring what to do. Often, an active partner doesn’t want to be in partnership with the Estate of the deceased partner and orderly exit/buyout needs to be negotiated.
  • Breach of Fiduciary Duty – A partner in a business has a duty to act in the best interest of the business and the other partners by implication. This is a high standard of responsibility and a breach of this duty can give rise to a damages claim by the other partner/s.
  • Misappropriation of business assets – This is where a partner uses the business assets and business funds for his or her own personal benefit, without the consent of the other partner/s.
  • Partner Underperformance
  • Management or personality conflicts
  • Distribution of profits and capital contributions – There can be disagreements about how business funds have been distributed.
  • Regulatory Issues such as taxation matters. This also includes other legal and accounting obligations.
  • Death of a partner – Which usually No matter the reason, partnership disputes can become messy and stressful. Left unresolved, they can be disruptive to your personal life and have a significant impact on the business. To mitigate any damage, seek legal advice sooner rather than later.

Not every case requires litigation and often patient negotiation, with the buffer of experienced lawyers in between, will bring about a sensible outcome.

Our dispute lawyers in Sydney can assist in resolving your partnership dispute in such ways as:

  • Advising you of your rights and obligations in the partnership/under a partnership agreement
  • Negotiating a settlement outcome whether through mediation or otherwise
  • Drafting terms of settlement
  • Representing you at mediation
  • Representing you in court proceedings
  • Assisting in negotiating and managing the exit of a partner from the partnership or even the dissolution of the partnership
  • Identifying potential problem areas in your business with our business check up to prevent future problems
  • Drafting a watertight partnership agreement to minimise the likelihood of partnership disputes in the future
sydney partnership lawyers

How are Disputes Resolved?

If you have partnership agreement, there is a dispute resolution clause in place. The dispute resolution process can then be followed if the other party agrees to engage. If you don’t have a written partnership agreement is in place the relevant legislation will dictate what should be done.

Our partnership dispute lawyers in Sydney will advise you as to your legal rights and work up a plan to put to the other side. If the matter can be resolved through negotiation, this is usually better than litigation, unless there is an urgent need, for example to freeze the assets of another partner. Where possible, we will pursue that path. Private mediation between the parties, with lawyers present to drive the process, is an option we often use with good success.

Partnership dissolution

If you are intending to bring a partnership to an end, this should be done in writing with high degree of exactitude. The terms of the settlement deed should be considered carefully – and especially so if you intend to continue to work in the same industry or a similar industry.

Some matters that might be considered in finalising the exit or dissolution of a Business Partnership include existing contracts, customer value and ownership, business debts, licences, final or future partnership tax liability.

We Can Help

Call our partnership dispute lawyers in Sydney today on 1300 907 335 or contact us by completing the enquiry form and we will get back to you promptly.

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