Partnerships are a much-misunderstood area of law. Partnerships are less common than they used to be, and as a result there are fewer legal practitioners out there who have significant experience in advising in relation to them.
Mann Roberts Solicitors have years of experience dealing with all aspects of partnership disputes. A particular specialism of ours is advising clients as to how to extract the value they have built up in the partnership.
Issues with partnerships most commonly arise when the partnership comes to an end, but the parties cannot agree what it is that they are actually entitled to from the partnership.
Disputes often arise when partnerships end as a result of:
Partnership disputes typically fall into two categories. The first category includes partnerships governed by a Partnership Agreement. This is a legally binding contract between all business partners, outlining each partner’s rights, responsibilities, and the rules for running the business. It often includes provisions for handling disputes, terms for partner exits and retirements, and formulas for calculating and paying out an exiting partner’s interest.
The second category includes partnerships governed by the Partnership Act 1892. This is a default set of terms that apply to partnerships in the absence of a written agreement. Under this Act, all partners are considered equal, sharing legal and financial liabilities equally. However, this can lead to complications, such as potential financial loss and legal liability, as well as an unclear and complicated process for exiting the partnership.
Therefore, it’s generally recommended for partners to establish a written Partnership Agreement to clearly define the terms of their partnership and avoid potential disputes.