A Business partnership is a term used for the legal agreement between two or more people to run a business together as co-owners. A partnership can be between individuals each having his or her investments in the business, or only working in the business while some partners have limited participation in the business. It is pretty much like a personal partnership with goals of making profits together, sharing each other’s skills and resources, sticking together in the bad and good times.
As we know there are pros and cons in every situation the same as in the case of business too. While partnerships may help you achieve higher profits and rise high with the success you have to be mentally prepared for conflicts, disputes, and disagreement among your business partners. No matter how successful is your business conflicts are inevitable. There can be smaller conflicts to large ugly fights involving legal actions.
Business partners, be it a friend or family shares intimate relationships which involve high-level emotions. So when conflicts arise emotions outruns the legal arguments which fail to give any productive solution. There are often arguments regarding who is right and who is wrong forgetting to concentrate on what is best for the business. It is the most dangerous part of the partnership which not only drops the profit rate but destroys the business, friendships, and families completely.
There are some common causes which surface the heated up arguments, rivalries, and conflicts. Such as:
1. Someone among the partners being unfair contributing less in business as per his share.
2. Using the company assets in misappropriate way.
3. Two individual partners thinking differently about the company.
4. Misleading the company assets.
5. Any of the partners not doing their job correctly.
6. Taking too many vacations and not properly concentrating on the business goals.
7. Your partners are not trustworthy or maybe you are unable to have trust in them.
8. Focusing too much on business destroying your personal life and any of you feel like you need to have more life balance.
9. Your partners are too much dependable on you.
10. The customers are not fond of your business partners
11. Arrogant partners who will never admit even if they are wrong.
12. The most dangerous ones threatening you if their purpose is not met.
Some of the other major causes revolving around the above reasons are:
A) Breach of Fiduciary Duty:
It is the duty of each business partners to give their 100 percent in business. They should not misuse the company funds to their own personal benefits or should not engage in anything that can harm the business interests of the partnership. But unfortunately, these are the inappropriate acts committed by the partners who result in serious disputes and finally putting an end to the partnership suffering the business a huge loss.
B) Disputes on the usage of Company Resources:
The business partners often forget that they have an agreement for the business based on which they should take their decisions. Instead of that, they get into personal conflict for any kind of resource usage like the use of financial resources to buy anything for the company. They keep on fighting uselessly with each of them having different opinion creating a huge conflict.
C) Failure to Delineate Authority:
To have a successful partnership it is important to distribute responsibilities perfectly to each partner and explaining them clearly about their role and duties towards business. Unclear distribution of work responsibilities will lead to frequent conflicts among the individuals as they will try to work on overlapping issues. It is important on the very first day, they read and understand each and every point mentioned in the agreement regarding the rights and obligations and adhere to them strictly through the entire process.
D) Failure to distribute workloads:
Each of the partners should have an equal amount of workload. If a single partner even feels his workload is unfair compared to others he will create a dispute most likely resulting in conflicts. Unfortunately, this is too a common scenario in a business partnership.
Are you also facing same type of the issues? If yes then please comment below and let us know your views. Remember it is not a normal issue and you can avoid. You need to fix it asap otherwise it may drown your business competly.