Fayetteville, AR Partnership Dispute Attorney
Partnership disputes are common when the owners of a business may have different visions of how the business should be operated. Many partnership disputes are resolved by adhering to the initial written agreement between the partners. However, if the contract is silent regarding how a particular disagreement should be handled, it may be difficult to reach a compromise. If you are having a dispute with your business partner, you should consult with an experienced Fayetteville partnership dispute attorney.
At Gunn Kieklak Dennis, LLP, our dedicated business attorneys understand how difficult it can be to resolve a disagreement between business partners once relations have turned sour. We will work with you to find the most desirable option for settling your business dispute. To schedule a confidential consultation, contact Gunn Kieklak Dennis, LLP at (479) 439-9840, or contact us online.
Types of Partnerships in Arkansas
A partnership is when two or more people decide to enter into a business arrangement together. While you can enter into a partnership without a formal agreement, it is a good idea to set out terms of the partnership and to choose a business formation. There are multiple types of partnerships, and there is likely one that meets your specific needs.
A general partnership is one type of business formation that new business owners may consider. This business structure is composed of two or more people who may offer money or labor to further a partnership. However, a general partnership is not the most popular choice because it does not offer protection from personal liability. Under a general partnership, business owners’ personal assets can be affected if the company loses a lawsuit.
A limited partnership is another type of business structure available to partners. Generally, a limited partnership is constructed of one or more general partners and one or more limited partners. General partners are responsible for managing the day-to-day business and are on the hook for any profits or losses the business incurs. Limited partners usually only invest money in the business and are liable for losses depending on how much money they invested, but they do not take part in day-to-day business operations.
A limited liability partnership (LLP) is similar to a general partnership. The main difference between the two is that one partner cannot be held liable for the negligence of another partner in the LLP. “Limited liability limited partnerships” (LLLPs) are also available as a business structure. This type of business makes general partners free from liability for actions of the LLLP itself.
To learn more about partnerships, you should speak with an experienced Arkansas partnership lawyer.
Common Partnership Disputes
A partnership dispute can occur for several different reasons. Each partner likely has goals for the business, and when those goals do not match, the partnership can be placed in turmoil. The following is a list of common partnership disputes.
Breach of Fiduciary Duty
Fiduciary duty is an obligation to act in the best interests of the business. There are various scenarios where a partner could breach their fiduciary duty. For example, a partner could use business funds for their personal gain. Other actions that negatively affect the business could also amount to a breach of fiduciary duty depending on the circumstances.
Disclosing Confidential Information
Your business may operate using confidential trade secrets or client lists that help you compete in a particular field. If a partner divulges these secrets to other people or businesses, this can hurt your business. Non-disclosure agreements (NDA) are a common part of many businesses, and violating an NDA could lead to liability for the individual who leaked information.
Breach of the Partnership Agreement
When partnerships are formed, the partners usually set out a list of terms denoting each person’s role in the business. When a partner does not adhere to the partnership agreement, they breached the contract and may be liable for damages. A breach can occur for many reasons, such as misusing resources or failing to perform a duty that a partner agreed to perform.
Some partners may believe that the obligations of the partnership are not equally distributed. This could mean that one partner is providing multiple services while another partner is simply accumulating the profits. You should ensure that a partnership agreement accurately describes each partner’s role in the business. Agreements that are ambiguous can make it difficult to assign equal roles among partners.
Our Fayetteville Partnership Dispute Lawyers are Ready to Represent You
If your business is being disrupted because of a dispute, you should contact an experienced Fayetteville partnership dispute lawyer. At Gunn Kieklak Dennis, LLP, we are dedicated to helping you resolve any issues that are negatively impacting your business. To schedule a confidential consultation, call us at (479) 439-9840.