Ensure you are fully prepared for every type of dispute. Here are the most common types of business disputes and their solutions…
Business and warfare often go hand-in-hand. The reason why many people use terminology such as “strategy,” “ruthlessness” and “great leaders,” as each can be applied to war.
Unfortunately, if you are running a small or large venture, the chances are high that you will encounter some form of argument during your company’s lifetime. To ensure you are fully prepared for every eventuality, here are the most common types of business disputes and their solutions.
Monetary Arguments with Business Partners
While business partners might have launched a venture as best friends, the relationship could potentially take a turn for the worst once a company is up and running.
Commonly, one partner tends to take charge of the operations, while another manages the financial aspect of the business. However, it is possible the financial partner might choose to embezzle funds, which the operations partner might not be aware of.
For example, they could switch a personal account to a business account or inflate their expenses. It is vital all business partners develop clear ownership rules before launching their venture so that each partner can keep track of the business and its finances.
Other ways to prevent money disputes include:
- Agreeing on partner salaries for the time and effort they put in
- Ensuring both partners approve of all expenses
- Citing profit distribution in an operating agreement
Professional Negligence
Unfortunately, not every professional you hire might be as honest, knowledgeable or as experienced as you expected. The counsel they provide could later prove to be irrelevant, incorrect, or unsubstantiated, and this poor advice could lead to a significant loss.
However, it is possible to make a claim against a professional advisor, such as a lawyer, architect or accountant. It’s also important to note you will still have a professional negligence case even if you did not have a contractual agreement in place, if they provided you with professional advice. You can visit Minton Morrill in Leeds for more information.
Intellectual Property
If a business is formed thanks to the partners’ intellectual property, it is crucial to take precautions to prevent an idea from being deemed the company’s property. Before officially starting the venture, develop a clear contract that states the intellectual property is owned by an individual and is only licensed to the business.
If a business dispute arises, the individual will have the option to revoke the license, which should be outlined in the agreement. It is an effective way to protect yourself, as well as your patents and ideas.
Conclusion
Business is not for the faint-hearted. If you want to succeed, you need to be prepared to fight your corner when necessary. Even if you are launching a company with your best friend, you must develop clear rules from the outset so that you will be protected should the business relationship take a turn for the worst.
Always legally protect your ideas, create explicit contracts, and aim to make an informed decision before hiring a professional advisor, which can each prevent disputes from emerging in the future.
