Disputes between Business Partners
A dispute with those you work with can be one of the most frustrating parts of our working life. Generally, but certainly not always, co-workers are like teammates. They have common goals and work with a sense of camaraderie. When work is not like this, it begins to appear a bit more like… work.
It can be especially frustrating when you have a problem with your business partner. Not only do you work with this person often, but you also try to grow the business together. You share in the profits. When a business partnership becomes frayed, it can threaten the business that you have worked so hard to establish.
Attorney Rob Cohen understands the pressures associated with running your own business, as well as the havoc that a disagreement with your business party can create. If you are having a dispute with your business partner in Northern Illinois and need help understanding your options, please contact him today for a free consultation. He can offer you solutions that will keep your business intact.
Partnership Formation in Illinois
In Illinois, the Uniform Partnership Act governs partnerships. It establishes that partnerships are entities separate from the partners that own it, and that any property owned by the partnership is not the property of individual partners. General partnerships are created whenever two or more people agree to do business together for profit.
No intent or agreement is needed to establish the partnership. That said, partnerships should take some steps during their beginnings. Partners should create a partnership agreement, outlining their goals and procedures. This agreement can also detail what to do in case the partnership needs to change or dissolve.
Partnership agreements are especially important because the rights that they contain can supersede the statutes that would otherwise control some of the partnerships functions, especially if the partnership is dissolving.
Partnership Duties in Illinois
Each partner owes his or her other partners various duties. They include duties of good faith and loyalty, essentially requiring each partner to work in the best interests of the partnership rather than in the interests of themselves specifically. These duties may not be altered by the partnership agreement.
Many disputes between partners occur when one partner violates his or her duties to the partnership.
Winding up the Partnership, or What Occurs When A Dispute Cannot be Solved
Under the Uniform Partnership Act, there are a variety of circumstances where the partnership is forced to wind down. This means that the partnership is ending.
The circumstances include any partner expressing a will to leave the partnership, the occurrence of an event enumerated in the partnership agreement that would trigger the partnership’s end, the expulsion of a partner, the death or incapacity of a partner, or various circumstances in which one of the partners becomes insolvent.
There are several ways to complete the winding down process. The goal is to make sure that each partner receives a share of the value of the partnership equal to the share enumerated by the partnership agreement or, in the absence of the partnership agreement, their contributions to the partnership. Determining the latter can be a difficult chore; an experienced attorney will be invaluable in helping you frame your contributions to the partnership.
This does not necessarily require that the business itself end. The partners may elect to sell the business or one partner may elect to buy out another. Or, they can elect to pay off the partnership creditors, liquidate the business’s assets, and share the money left over. The options, while not limitless, are varied.
Just because you are suffering through a dispute with your business partner does not mean that you have to wind down the partnership. Passions can calm. Anger can turn into acceptance.
If you are having a dispute with your partner, you need an experienced attorney who can help you understand and protect your rights. Attorney Rob Cohen prides himself in steering his clients through partnership disputes in a way that will do as little damage to the partnership—your livelihood—as possible.
If you, regardless of the size of your business, are suffering through such a dispute in Illinois, contact Rob at 847.256.0800 today for a free consultation.