In the business world, disputes between partners and shareholders are common and can and do arise over a myriad of situations. Disputes can arise over the logistics of handling work flow, over finances, over administration and other areas within the purview of the business. Conflicts can arise between majority and minority shareholders and partners. Sometimes, there may even be a dispute concerning the existence of a partnership since not all partnerships are formal business ventures.
These types of disputes are often highly emotionally charged and tend to negatively affect a business quickly. Therefore, it is best to seek a solution quickly.
Often the business documents drawn up at the inception of the partnership or business venture will dictate how a dispute is to be settled. It is always best to look toward the Partnership Agreement or other agreement first. This document may dictate what alternative dispute mechanisms are to be used and in what circumstances. This is likely the quickest and least expensive solution to the problem. Likewise, the document may outline how and under what circumstances dissolution is to be sought, and when and how the issue of valuation of the venture is to be handled.
If no formal agreement exists, there are solutions short of litigation or dissolution. Alternative dispute resolution mechanisms such as mediation or arbitration can be used to help settle the dispute and preserve the business partnership or venture.
Partnership and shareholder disputes are often highly divisive. Handling its disputes is not unlike the handling of a divorce. A third is party of often needed to calm the parties and to gain perspective. Thus, mediation is often the tool of choice in partnership and shareholder dispute resolution.<,br>
Mediation is a structured negotiation with a skilled mediator. The mediator will work with all parties to see if the matter can be resolved quickly, moving all parties to an agreement. Arbitration is usually a more formal proceeding. It is more like an informal court proceeding, and its outcome is often binding on the parties.
Partnership and Shareholder Disputes
In almost all cases, consulting with an attorney can help find a resolution quickly. If mediation or arbitration are not available or are not successful, the matter will most likely have to be litigated in the courts. This can prove costly but is sometimes unavoidable. Although litigation is often difficult on the litigants, having a good attorney can help. It is best to know what all the options are before a dispute spirals out of control or damages a business. Seek legal help early, especially from an attorney with experience in Partnership and Shareholder Disputes.