20 Feb Case Study – Partnership disputes
Partnership disputes are so much more easily resolved and agreements reached if there are strong and legally binding partnership agreements in place.
Entering into a formal, written Partnership Agreement from the start, setting out what the parties want to have happen in scenarios such as disagreement and dissolution, can save you a lot of time and money if a partnership dispute arises.
The following is a fictitious case study taken from an amalgamation of actual cases.
“If it all goes South, you really need a partnership agreement in place to enable swift resolution to partnership disputes and/or splits.”
Scenario
Mark started a product design business with his old school mate Rob.
They invested in machinery like 3D printers, established a trendy business name and a customer base, had a bank account in their partnership name and incurred most of the usual expenses of a startup.
Unfortunately, they did not document their arrangement with a Partnership Agreement.
At some point, the two mates fell out and Rob walked out of the business. Mark wants to continue with the business on his own.
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Tying up all the loose ends, including taxes, distribution of assets, and ownership of intellectual property has been time consuming and expensive for Mark. Rob isn’t interested in leaving the business without a payout of money and both of them are at a stalemate and a dispute is likely.
The process could have been a lot simpler, had he and Rob entered into a formal, written Partnership Agreement from the start, setting out what the parties wanted to have happen in scenarios such as a partnership dispute, disagreement and dissolution, among other things.
Unfortunately, now Mark has to consider winding up the business or taking Rob to Court to get an order. He never thought this would happen and the business is now suffering from the extreme uncertainty and is stagnating.
Contact us today if you require any assistance with preparing or reviewing your Non Disclosure Agreement.
(c) Progressive Legal Pty Ltd – All legal rights reserved (2020)
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Ian Aldridge is the Founder and Principal Lawyer Director at Progressive Legal. He has over 15 years experience in advising businesses in Australia and the UK. After practising in commercial litigation for 12 years in major Australian and International Law Firms, he decided to set up a NewLaw law firm in Australia and assist growing Australian businesses. Since then, he has advised over 2,500 small businesses over the past 6 years alone in relation to Intellectual Property Law, Commercial, Dispute Resolution, Workplace and Privacy Law. He has strived to build a law firm that takes a different approach to providing legal services. A truly client-focused law firm, Ian has built Progressive Legal that strives to deliver on predictable costs, excellent communication and care for his clients. As a legal pioneer, Ian has truly changed the way legal services are being provided in Australia, by building Legal Shield™, a legal subscription to obtain tailored legal documents and advice in a front-loaded retainer package, a world-first. He has a double degree in Law (Hons) and Economics (with a marketing major). He was admitted to the Supreme Court of NSW in 2005.
