Partnership Disputes — Litigation/ADR/Mediation
When you go into business with another person in DuPage County, you may have entered into a partnership. However, there are many different kinds of business structures, and disputes among business owners are handled differently depending upon the type of business structure you have. To understand the different options for handling partnership disputes, it is important to learn more about partnerships generally. Then, we will explain the different ways that a partnership dispute can be addressed and how a DuPage County business law attorney can help.
What Is a Partnership and How Do Partnership Disputes Arise?
A partnership is a business structure that is owned by two or more individuals. There are two different types: general partnerships and limited partnerships. General partnerships are those in which the partners equally take responsibility for the business, meaning that they share debts and business obligations. Limited partnerships are a bit different in that they have general partners and limited partners. The general partners have similar obligations as partners in a general partnership, but limited partners typically invest in the company without having any control over it (or liability for it).
Disputes can arise in both types of partnerships. In some cases, partnership disputes arise when one partner acts in a way that threatens the financial health of the business or opens up the other partners to liability. Partners in a business have a fiduciary duty, and when it looks like one of the partners has breached his or her fiduciary duty, disputes can arise.
What Are the Options for Handling Partnership Disputes?
There are different ways to handle partnership disputes. The following are often discussed as methods for addressing partnership disputes, and we will provide you with some additional information about their pros and cons.
- Alternative Dispute Resolution (ADR): Alternative dispute resolution is a general term for settling disputes without litigation. Generally speaking, ADR takes less time and is more cost-effective than litigation. There are several different kinds of ADR, but the most common are arbitration and mediation. Arbitration is a process through which a third party serves as an arbitrator in a dispute, hears both sides, and comes to a binding decision.
- Mediation: Mediation is another form of ADR. Unlike arbitration, mediation is more of a negotiation process that is facilitated by a neutral third party known as a mediator, but the mediator does not reach a conclusion himself or herself. Instead, the mediator helps the disputing parties to negotiate and to come to an agreement.
- Litigation: When forms of ADR fail, partnership dispute issues typically result in litigation. Litigation refers to a legal process through which two parties have their dispute settled by a judge or a jury. Litigation takes more time and typically is more costly than ADR.
Contact an Oakbrook Terrace Partnership Dispute Attorney
Facing a partnership dispute in your business can be daunting. While it is often the most cost-effective option to avoid litigation, it may turn out that methods of alternative dispute resolution simply cannot resolve the partnership dispute. An experienced DuPage County business lawyer can help you through the processes of arbitration and mediation, and if ADR does not work to solve your dispute, we are ready to move onto litigation. We have years of experience assisting small business owners in the Muslim community, and we can speak with you today about your partnership dispute. Contact Farooqi & Husain Law Office for more information about our services.