Common Disputes among Partnerships and Shareholders

Disputes can be common among partners and shareholders. While no one enters into a partnership agreement anticipating conflicts, arguments and disagreements are inevitable. More often, partners or shareholders can settle their differences independently.

In other cases, disputes may involve intricate matters hindering the business's progress. Hence, dispute resolution may seem impossible even with the most comprehensive agreements. When it gets to this point, seeking assistance from a skilled business dispute lawyer is highly recommended.

How Disputes Arise

Corporate and partnership businesses often deal with complex issues. So it's not uncommon for partners to disagree about critical matters related to business. These disagreements are commonly associated with manipulating stock values, termination of a minority shareholder's employment, denial of access to corporate records, misallocation of corporate funds, or withholding payments.

Unfortunately, disputes can result in partnership dissolution, plus any efforts to address these conflicts may affect the business.

Partnership and Shareholder Dispute

Most common disputes between shareholders and partnerships that may require litigation include:

• Breach of Contract: Partnerships are built on contracts, which hold agreements of partners. A dispute occurs when one shareholder or partner claims the other party has violated the contract. Thus, a partner can breach the contract if they fail to fulfill its terms and conditions without legal justification.

• Buy-Sell Agreements: Buy or sell agreements are a common cause of partnership disputes. Conflicts may occur when the business assets are being sold or bought. In particular, if there is no formal agreement, these disputes can compromise the business operation.

• Succession Planning: Company succession disagreements are often reported in family-owned enterprises, where shareholders or partners may question the succession planning. These disputes can jeopardize the partnership, affecting the well-being of the business.

• Divulging Company Secrets: Mistrust and disputes might arise if one or more partners decide to share company secrets with others. When this occurs, it’s important that it gets resolved quickly as it could harm the partnership if left unresolved for too long. 

• Breach of Fiduciary Duty: A breach of fiduciary duty is when a partner or shareholder fails to meet their mandated obligations. This can jeopardize the partnership and hurt business operations. Thus, this problem should be resolved as soon as possible.

Addressing Partnership and Shareholder Disputes

When partnership and shareholder conflicts occur, the individuals involved may attempt to settle them independently. But they may not always be able to reach an agreeable solution and thus may want to proceed to litigation. Skilled Charleston business dispute lawyers can help partners and shareholders who wish to go through the litigation process.

Get Help from Our Charleston Business Dispute Lawyers

Lesemann & Associates has extensive experience in business and real estate litigation. Our Charleston Business Dispute Lawyers are familiar with the unique challenges related to shareholder and partnership disputes. 

‍Schedule a consultation today or call us at (843) 724-5155 to discuss your partnership and shareholder dispute with Ellis Lesemann, a leading business dispute attorney at Lesemann & Associates.