Business partners might find themselves disagreeing about a variety of matters. Sometimes, an unexpected offer to buy the business could leave them arguing about the future of the company. Other times, partners’ visions for company development may begin to diverge after a few years.
Misconduct on the part of one partner could also do significant damage to the working relationship. If one partner believes that the other violated their fiduciary duty to the organization, they may question whether continuing to work together is appropriate or even safe. How can one partner protect themselves or the organization they run when the other has breached their fiduciary duty?
Planning carefully
Rushing into a confrontation with a business partner is generally a recipe for disaster. It can damage the working relationship between the partners and also cause tensions if any employees learn about the conflict.
Additionally, accusations of misconduct not yet backed by evidence could lead to one partner destroying evidence or altering records to protect themselves. Frequently, those who suspect a breach of fiduciary duty may need to gather evidence and review documentation about the partnership agreement in advance.
Offering a clean exit
When one partner has breached their fiduciary duty, invoking the buy-sell agreement included in the initial contract between partners could be beneficial. When incompetence or self-serving conduct destroys the trust between partners, seeking to gain sole control of the organization might be appropriate.
Other times, litigation might possibly be the best option. If one partner’s conduct has had a verifiable negative impact on the company’s finances, litigation could help resolve the issue.
Business partners hoping to resolve a partnership dispute stemming from a breach of fiduciary duty may need support. Business litigation is sometimes necessary when a partner won’t sell or has caused significant economic damage to an organization.