The Common Reasons To Hire A Business Law Attorney For Partnership Disputes In California
You don't enter a business partnership expecting things to go wrong. However, some disagreements can't be avoided. Like any relationship, business partnerships can change with time.
That said, how do you know you have a business dispute and not an innocuous disagreement? Let's look at the most common reasons why you'd need a Newport Beach Partnership Dispute Attorney.
A Newport Beach Business Law Attorney can assist you in drafting a good partnership agreement that will help you prevent partnership conflicts down the road.
However, even if you have a good partnership agreement in place, you may need to settle various issues that arise in your partnership.
Here are the most common reasons you might require the services of a prescreened Newport Beach Partnership Dispute Attorney:
1. Breach Of Fiduciary Responsibility
Business partners owe each other fiduciary duties of loyalty and good faith that they must uphold, which include:
Not to be in direct competition with the partnership
Not break the law or engage in willful misconduct
Report profits
Report use of partnership property
Act on behalf of competitors
Not act with extreme negligence or recklessness
You may be able to obtain an injunction or recover compensation and even punitive damages if a partner breaches a fiduciary obligation.
2. A Partner's Expulsion
A partnership can sometimes become unworkable due to one of the partners' behaviors. When this happens, you might need to kick out the difficult party to resolve the issue.
Your partnership agreement might call for expulsion for any of the following reasons:
Being charged with a crime
Being convicted of a crime
Making a bankruptcy filing
Poor professional conduct
Failure to fulfill the partnership agreement's duties
Breaking the terms of the partnership
For more details on how an expulsion is handled, contact a Newport Beach Partnership Dispute Attorney to help you out.
3. Disagreements On Business Decisions
As a business grows, disagreements among partners over how the company should be run are common. The following are some of the most common disputes:
How to make the most of the company's resources
Who is in charge of making decisions
Which business prospects should you pursue
What to do with the company's income
What the most important goals are
Most of these disagreements should be avoided if you have a well-drafted partnership agreement. However, you may not have a partnership agreement, or your contract may be incomplete, or you may differ on how to interpret your agreement.
If this is the case, you may need to hire a prescreened Newport Beach Partnership Dispute Attorney to assist you in resolving differences.
Contracts and agreements may include the following clauses:
Non-disclosure contract
Non-compete clause
Contract of employment
A collaboration arrangement
A Newport Beach Business Lawyer can assist you in resolving a breach in the provisions of a partnership contract.
5. Dissolution
Disagreements and friction can cause a partnership to break down. When this happens, you might need to dissolve a partnership.
In other cases, one of the partners simply decides to leave the company, becomes unable to participate, retires, or passes away. A partnership may also come to an end when a defined time expires or when the partnership's purpose is fulfilled.
Whatever the reason for dissolution, it might lead to a partnership dispute over problems such as:
The value of a terminated partner's company share
Whether a partner has broken the partnership agreement's terms
How you divide the assets of a partnership
How partnership debts will be paid
Buy out a withdrawing partner
Many concerns linked to partnership dissolution, like those relating to how the business is run, can be settled by consulting the provisions of your partnership agreement.
When terminating a partnership, regardless of your position, it is a good idea to counsel with a qualified prescreened Newport Beach Business Lawyer to ensure that your interests are safeguarded.
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