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Why do some business partners fall out?

On Behalf of | May 13, 2024 | Business Law

A business partnership can be fruitful for all parties. Partners can divide responsibilities and share liabilities and financial obligations.

Nonetheless, there are occasions where business partnerships don’t work out as intended. A dispute between business partners can be time-consuming and expensive, and it may ultimately place the company in jeopardy.

Why do some business partners fall out?

A change in objectives

During negotiations, prospective partners often find themselves on the same page in terms of objectives for their company. Nonetheless, goals and objectives can change. If one partner has heightened ambitions for the business upon arrival, but the other partner wants to keep things small-scale, this can be a source of dispute, for example.

Unfair workload

Oftentimes, business partners will split profits 50-50. Generally, this means that they share 50% of the workload too. Roles and responsibilities can be divided based on the strengths and weaknesses of each partner. For instance, one partner may be a motivator, so they can take on a more hands-on role with employees. The other partner may be more of a number cruncher, so they can ensure that the books remain up to date, and so on. If this distribution of workloads is viewed as unfair by one partner, this can be a source of dispute. For instance, if one partner has been away on several vacations while the other hasn’t even had a day off, this is likely to cause problems.

Any business partnership should be backed up by a sound legal contract. This can help to prevent disputes, and resolve them should they occur. Seek further information if you are caught up in a partnership dispute, or you’re hoping to prevent them proactively.