Business partners begin a venture together, hoping to further a concept or idea and profit from it. It seems exciting at first, especially when they agree on everything. But that does not always happen. People have varying opinions about how to approach certain situations.
Business partners must agree on the operations and logistics of the business. They must both be amenable to how they will share the profits or whether they will invest it in their company. Also, they should know what to do when a partner wants to opt out of the partnership. Business partnership disputes happen because the partners cannot see eye to eye on business-related matters. Such disputes can ruin any business, even a successful one.
How can you address business partnership disputes?
Addressing a business dispute will rely on your current relationship with your partner. Of course, you would begin by talking to them amicably about the issue. However, conflicts can escalate, ending a business relationship for good. Here are the options you can consider:
- Negotiating a settlement with your partner
- Mediation
- Partnership buyout
- Dissolution of the business
- Litigation
If you decide to pursue litigation, you could sue your business partner because they breached their fiduciary duty. You can also pursue litigation when a business partner breaches the terms and conditions explicitly outlined in your partnership agreement.
How does Colorado law protect partnerships?
According to Colorado’s Uniform Partnership Law (C.R.S. § 7-60-101), partners have a duty to act in the partnership’s best interests. Any action that violates your duty to the partnership or intentionally causes harm to the business is a breach of fiduciary duty. The law states that partners must act in good faith and have a duty of loyalty to the partnership, meaning it is illegal for a partner to prioritize their own interests over the partnership. The law can render null and void provisions in a partnership agreement if these support a violation of the fiduciary duty.