Dealing With Partnership Disputes

Source: Accounting Today

This article points out that certain areas of potential partner dispute are particularly sensitive now. Pending retirements, along with partners' reluctance to leave because of their fear for the survival of the firm (and therefore its ability to pay them out), are creating problems.

Other areas that frequently generate disputes include compensation, split-ups, and family matters.

What to do--First make sure there is a partnership or shareholders' agreement. If a partner is planning to reduce his/her time in the next few years, there should be an agreement on the buyout terms and amount.

If new partners are expected to be admitted, buy-in provisions should be reviewed or created. Buy-out and buy-in amounts are often the same, so it makes sense to review them simultaneously. Compensation amounts and methods should be included in a rider attached to the agreement (so they can be amended periodically without rewriting the agreement).

Address disputes in a timely manner. Don't let them worsen. Employ a third party if a resolution is not possible. Arbitration is expensive and should only be the penultimate step.

For the complete article, click here and select the article "Avoiding and Resolving Firm Partnership Disputes" in the June 15, 2009, issue.

From Accounting Today, June 15, 2009, SourceMedia Inc., One State Street Plaza, 27th Floor, New York, NY 10004, 800-221-1809.

Address disputes in a timely manner. Don't let them worsen. Employ a third party if a resolution is not possible. Arbitration is expensive and should only be the penultimate step.

For the complete article, click here and select the article “Avoiding and Resolving Firm Partnership Disputes” in the June 15, 2009, issue.

From Accounting Today, June 15, 2009, SourceMedia Inc., One State Street Plaza, 27th Floor, New York, NY 10004, 800-221-1809.