Partnership Disputes

Business Litigation Attorney Serving the Interests of Plymouth County Residents

You can head off many disputes with a business partner before they develop by drafting an effective operating agreement from the outset. Such an agreement will establish each partner's rights and obligations. However, even when a solid operating agreement is prepared, contingencies may arise that give rise to disputes. If you face a partnership dispute, you should retain an experienced business litigation attorney as soon as you can. It is important to work with someone who understands the objectives of your business and how important your business is to you. Plymouth County partnership dispute lawyer Michael S. Mehrmann can skillfully use the law and any pertinent documents and contracts to leverage a fair outcome.

The Complexities of Partnership Disputes

A partnership is an association of two or more people who are co-owners of a business for profit. Registered limited liability partnerships are one type of partnership. Massachusetts law gives partnerships a great deal of flexibility to structure the rights and obligations of business partners. A partnership agreement or operating agreement can be drafted during the formation of a business to establish the terms that guide and govern the relationship of business partners. This can minimize disputes that arise and provide for specific mechanisms to handle them.

There are many different types of disputes, and Massachusetts law may dictate how they are resolved. Sometimes a partner causes some type of injury or loss to someone outside the business, based on a wrongful action or a lack of action. If the wrongful act or omission was committed in the ordinary course of the business, or with the authority of other partners, the partnership can be liable to the same extent as the partner who acted or did not act. In some cases, a partner might have believed that they were acting with the agreement of the other partners, but this turns out not to be the case. A partner might misappropriate the money or property of a third person, thereby putting the partnership in a position where it must make good the loss.

In other cases, partners disagree about what their rights and duties are. A partnership dispute attorney in Plymouth County can help explain your obligations in a specific situation. Under Massachusetts law, each partner is supposed to be repaid their contributions to the partnership and share equally in any profit or surplus left after all liabilities are satisfied. Partners are supposed to contribute toward losses according to their share in profits. When a partner makes a payment or advance beyond what they agreed to contribute, they are supposed to be paid interest from the date of the payment.

Generally, disputes about ordinary matters related to the business can be resolved by a majority of the partners if a partnership agreement does not state otherwise. However, no act that contravenes an agreement among partners can be done lawfully without all of the partners' consent.

Sometimes a dispute arises because partners are not allowed to see the books or accounting. Under Massachusetts law, all of the partners have the right to inspect and copy the partnership books, unless there is a different agreement among the partners. The books are supposed to be at the principal place of the partnership's business. A partner is entitled to a formal account of partnership affairs if the co-partners wrongfully exclude them from the business or from possessing partnership property, if the partnership agreement provides for this right, and under other circumstances.

Generally, all partners are expected to act in good faith toward one another and with loyalty toward the business. Partners are not supposed to seize opportunities for themselves that belong to the partnership. They cannot take intellectual property from the business for their own personal use. In some cases, it is appropriate to bring suit for a breach of fiduciary duty or misappropriation.

When possible, it is helpful to have a provision in the operating agreement that spells out how internal conflicts are to be resolved. However, there are some disputes that are so acrimonious that they proceed to litigation, and they may require a judge to make findings and orders. Sometimes the remedy for a partnership dispute is the expulsion of a partner. The operating agreement may allow for expulsion in good faith as long as certain terms are met. In other cases, the dissolution of the business may be necessary.

Retain a Sophisticated Partnership Dispute Lawyer in Plymouth County

Partnership disputes can take a toll on a business. It is important for partners to retain knowledgeable legal counsel when faced with a potential internal conflict so that the matter can be resolved with the least possible disruption to the business and the individuals involved. Our firm takes pride in providing superior legal services at a fair rate. Plymouth County partnership dispute attorney Michael S. Mehrmann has the experience and skills needed to provide strong legal representation. He assists clients in communities such as Kingston, Plymouth, Marshfield, Hanson, Carver, Pembroke, and Duxbury. Call us at (781) 585-3911 or complete our online form.

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(781) 585-3911