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Issues that can cause friction between business partners 

On Behalf of | Jun 3, 2024 | Business Law

A business partnership can be a highly beneficial arrangement. Business partners can share financial responsibilities, workloads and liabilities. That being said, some partnerships work out better than others, and disputes can arise. 

Outlined below are some issues that can result in friction between business partners

Commitment to the company 

Business partners can have different management styles and approaches, but one thing that must remain constant is their commitment to the company. Business partners have a fiduciary duty. Essentially, any actions they take must have the business’s best interests at heart. 

Some partners are only involved in one company, which is their sole focus. Other partners are involved with multiple businesses. While this is not a problem in itself, it can become a problem if they lose focus or begin to prioritize their other ventures. 

Unequal workloads

A benefit of a business partnership is that workloads can be distributed according to strengths and weaknesses. Nonetheless, partners should be putting maximum effort into their designated tasks. If one partner receives the same profit share for doing much more work, then this is bound to cause friction.

Poor communication 

A functioning business partnership relies on effective communication. Discussions should take place between business partners before any major decisions are taken. If a partner does not communicate, this can cause tension. For example, if a partner terminates a key staff member without consulting the other partner, this can result in a dispute. 

Having a watertight partnership agreement is one of the best ways to prevent disputes because each partner will know exactly where they stand. Legal guidance will be helpful if you have gotten into a dispute with your business partner.