Business partners come together in California because their pooled resources and talents may have more potential than their individual efforts. Although these types of partnerships often prove fruitful, they can become mired in conflict for many reasons. Poor communication, dropping revenue or mounting debts may sometimes be resolved without going to court through mediation or selling the business. However, some disputes are so intractable, such as partner misconduct, that partners decide to make their cases in court.
Business partner misconduct
You and your partners rely on each other to meet your obligations to the business and act lawfully. Neglect of duties or outright crimes on the part of one or more partners naturally alarm the other partners. For the sake of saving the business, you may have to force a partner into court to correct the situation.
Examples of misconduct:
- Ignoring important job duties
- Breach of fiduciary duty
- Fraud
- Misappropriation of funds
If you cannot settle serious matters like these privately, you can file a civil lawsuit against the misbehaving partner. Your filing will detail what the offending partner did or did not do that violated your agreement or the law. If successful, you could recover damages.
Dissolution of partnership
At times, personal differences instead of outright misconduct motivate partners cease working together. In this situation, you have the option of dissolving the partnership. You may accomplish this on your own, but you and your estranged partner have to agree to the terms of the liquidation process.
If you cannot come to terms, then judicial intervention remains the only way to end the partnership. When a court must decide how to divide your business assets and liabilities, the judge applies the law without necessarily satisfying your wishes.