Many entrepreneurs in California elect to form partnerships when they go into business with others. While this type of arrangement is often productive, problems may develop as the business matures and grows. Other partnership disputes may occur when new partners who may have differing views about how to move the business forward are brought into the picture. Partners who fail to address these issues in a timely manner run the risk of turning a mild disagreement into a serious confrontation.
Many partnership disputes may be avoided by identifying potential areas of disagreement and putting contingencies in place. An operating agreement that clearly defines roles and responsibilities should be drawn up and signed, and it would be prudent for this agreement to outline how future conflicts will be resolved. The language of this document should be clear because its purpose is to provide enforceable action plans for anticipated scenarios.