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Business litigation: partnership disputes and resolutions

Sharing the load with a business partner is supposed to make owning and operating a company easier, right? Unfortunately, it is not uncommon for business partners in Wisconsin and elsewhere to disagree on things or run into issues that may require legal actions. This week's column will address three of the most commonly seen partnership disputes and discuss if business litigation is necessary to resolve them.

The first problem to be discussed is operational disputes. Partnerships take on many forms. Some partners choose to share equally in management; in other partner relationships, one individual may take a more prominent role in operations and the other may wish to be seen as more of an investor. Either way, partners may clash when it comes to how their company is being run and how each owner is handling his or her responsibilities. Such issues may be resolved by talking through the problems, negotiating a new partnership agreement -- if thought necessary -- or dissolving the partnership if agreeable terms cannot be met.

The second problem to be discussed is monetary disputes. Money is often the root cause of many partnership disputes. People may get upset about salaries, expenses, profits or losses. Money issues can be avoided with careful communication and a solid operating agreement. Monetary issues such as embezzling or misuse of funds may have to be resolved in court.

Finally, problem number three has to do with intellectual property. Numerous companies are formed around intellectual property. To whom does that property belong, though -- the company or one of the partners? If one person created it but does nothing to protect it and him or herself, the property may be considered company owned. This means if that person leaves the company, he or she will have to leave behind the property as well.

Resolving a partnership dispute may be as easy as talking through the problem. If that doesn't work, mediation may prove beneficial. As a last resort, business litigation may be necessary. It all depends on the complexity of the issues at hand. An experienced attorney can help business partners in Wisconsin find the best way to resolve their disputes.

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