Partnerships are one of the most common types of business structures in the State of Texas. While many of these businesses thrive, others devolve into conflict due to disputes between partners. These issues can be made worse when the terms of the partnership agreement are poorly drafted.
Partnership agreement disputes in San Antonio can bring a thriving business to a sudden and disappointing end. The best way to avoid these issues is to rely on legal counsel who understands how to draft the right agreement. Attorney Sasha Begum is prepared to advise you on your options.
Partnership agreements are legally binding contracts that are useful when two people go into business together. They outline the basic terms of the partnership, including rights, responsibilities, and the nature of the arrangement itself.
These agreements cover a wide range of issues related to the operation of the business. They start with the basics, which include the type of partnership being created and the identity of the people involved.
Partnership agreements should also list the roles each party will play. If roles are divided between the partners, the agreement should outline who is responsible for what. This includes everything from hiring employees to purchasing assets.
Arguably, the most important aspect of this type of contract relates to income and debt. If the parties agree to something other than an equal split of profits and losses, it is crucial for that arrangement to be stated clearly in the document.
Finally, it is a good idea to have terms related to the end of the business. Partnership agreements in San Antonio can lead to disputes following the withdrawal or death of a partner.
Disputes between partners can arise for a variety of reasons. In many situations, these issues could be avoided if it were not for underlying issues in the partnership agreement. From drafting mistakes to conflicting language, seemingly minor issues can quickly progress into something more serious. Some common problems that may cause disputes regarding partnership agreements in San Antonio include the following:
The most common issue that can lead to conflict between partners is breach of contract when one or both parties violate the terms of their agreement. This might involve failing to perform a task as required or using assets in a way that is not authorized.
It is not uncommon for one partner to have the primary responsibility of a company’s day-to-day activities. While partners can frequently disagree on the best way to run a business, these issues can put the company at risk if the agreement does not provide a clear process for resolving disputes.
Partners have an obligation to act in the best interest of the partnership. They have an obligation of good faith and loyalty to their partners, and violating this fiduciary duty can lead to significant consequences.
The purpose of these agreements is to create transparency and ensure that all parties are in alignment when it comes to duties, rights, and responsibilities. When the result is unequal contributions between the partners, conflicts can arise.
Some disputes between partners might be unavoidable, especially when navigating difficult financial situations. However, many of the conflicts that ultimately cause a company to collapse could have been prevented with a better agreement in place.
Our team at Begum Peláez-Prada PLLC is here to help with your partnership agreement disputes in San Antonio, or in any of the surrounding areas, including Dreamhill Estates, Los Jardines, Olmos Park, Prospect Hill, Terrell Hills, and Tobin Hill. Contact us as soon as possible to discuss your legal options for your business.
