Partnership Disputes

At Judge & Priestley Solicitors, we have helped many business partners resolve their disputes successfully. 

Many people do not realise that if you go into business with one or more people, the law will consider you are in a legal partnership, whether or not you have drafted a formal partnership agreement.

Our commercial team will listen carefully to the details of your dispute, and use alternative dispute resolution methods such as mediation to try and resolve the argument and maintain the relationship so your business can continue to develop.

Resolving Disputes if there is no Partnership Agreement

If things go wrong in a partnership and there is no partnership agreement to fall back on, the individuals involved have to rely on the provisions contained in the Partnership Act 1890.  The Act is not always very helpful when it comes to resolving disputes (which is why we strongly advise that you should have a comprehensive partnership agreement in place).

The key points to be aware of when relying on the Act are:

  • does the business relationship amount to a partnership under the Partnership Act 1890?  The Act defines a partnership as “a relationship which subsists between persons carrying on a business in common with a view of profit.”  
  • all partners are jointly liable with their other partners for all debts and obligations of the partnership while he or she is a partner.
  • so long as a partner is acting in the ordinary course of the business of the partnership, any wrongful act or omission by any partner shall render the entire firm liable for such act or omission.
  • a person admitted as a partner into an existing partnership does not thereby become liable to the creditors of the firm for any debts incurred by the partnership before he or she became a partner.
  • a partner who retires does not cease to be liable for partnership debts incurred before his or her retirement. 
  • the majority of partners do not have the power to expel any other partner unless the power to do so has been conferred on the partners by express agreement. 
  • any partner may determine the partnership at any time by giving notice to all partners. 
  • partners must account to the firm for any profits made by him or her from any competing business of the firm.
  • the Act also sets out rules for distribution of assets of the partnership upon dissolution. 

Resolving Disputes if there is Partnership Agreement in Place

A well-drafted partnership agreement will contain a clear and comprehensive disputes resolution procedure as well as stipulate the process for a partner to be ejected from the partnership, and the duties of each partner in relation to the day to day running of the business.

If one or more of the partners fails to comply with the terms set out in the partnership agreement, an action for breach of contract can be brought.

Partnership disputes can become long running, costly and can undermine the continued success of the partnership business. A clear understanding is required of the issues, the merits and the commercial outcomes desired, to ensure that a clear case plan and cost budget can bet set for the resolution of the dispute.  Our commercial solicitors are experts in achieving these objectives to enable an efficient resolution.

If you are experiencing a partnership dispute, let us help you resolve it in a timely, cost-effective manner so you can resume concentration on growing your business.

Call us on 020 8290 0333 or fill in our contact form and we will be in touch with you shortly.