Partnership disputes can threaten the stability, reputation and financial future of a business.
Whether you operate as a traditional partnership under the Partnership Act 1890 or as a Limited Liability Partnership (LLP) under the Limited Liability Partnerships Act 2000, early legal advice is essential to protect your interests.
Our experienced Dispute Resolution team advise partners, LLP members and business owners across England and Wales on resolving complex disagreements efficiently and commercially.
Common causes of partnership disputes
Disputes between partners can arise for many reasons. Understanding the most frequent sources of conflict can help reduce risk and resolve issues at an early stage.
- Financial Disputes – Disagreements over money are one of the leading causes of partnership disputes and may include allocation of profits and losses, dividend or reinvestment decisions, allegations of excessive drawings or improper expenses, access to financial information and others.
- Breach of fiduciary duty – Partners owe each other strict fiduciary duties, including duties of honesty, good faith and acting in the best interests of the partnership and disputes frequently arise from allegations of conflicts of interest, diverting business opportunities, misuse of partnership assets, self dealing/secret profits.
- No written or poorly written partnership agreement – Many partnerships operate without a formal, up-to-date agreement. Which means, the default provisions of the Partnership Act 1890 will apply — including equal profit sharing and shared management rights, regardless of individual contributions. The lack of clear written terms governing the partnership can lead to uncertainty for the partners which then can lead to areas of conflict. Without a clear exit or dispute resolution mechanism, these situations can lead to deadlock or dissolution.
If financial disagreements are not addressed promptly, they can escalate quickly and undermine trust within the business.
How we can help you?
We understand that partnership disputes are not only legal issues; they are often deeply personal, very stressful and risk causing serious harm to the business.
Our team can assist you by:
- Drafting effective, clear partnership or LLP agreements (where there isn’t one)
- Reviewing and updating existing partnership or LLP agreements
- Providing advice at an early stage where there are issues between the partners
- Resolving partnership disputes through negotiation and/or mediation
- Ensuring you receive clear, practical guidance at every stage
- Representing you robustly in any court or arbitration proceedings.
Find out more about the team
