Partnership Dispute

Business Partnership Dispute Lawyer, QLD

For a business partnership dispute lawyer in Gold Coast, you can surely trust QBM Lawyers.

We can assist clients in partnership disputes and disagreements. Our team provides expert advice on resolving conflicts and renegotiating terms. All while ensuring fair outcomes.

Besides that, we work diligently to protect your interests. Our business partnership dispute lawyer also maintains the stability of your business relationships.

What is a Partnership?

A partnership is generally an arrangement made between two or more people or companies to carry on a business (including in some cases, owning property).

Partnerships can be between companies, the trustees of trusts, individuals, or any combination. Sometimes, partners will appoint an agent to represent them and hold property.

However, a partnership is different from people running a company together. Sometimes, they might be called a “quasi partnership” if the specific people involved are very important to the business. Other times, their rights come only from owning shares or being directors, and the idea of a partnership does not apply.

Partnership agreements can be written, but they can also be established through verbal agreements, written correspondence, or conduct.

Rules to Assess if a Partnership Exists

In Queensland, the Partnership Act of 1891 has rules to decide if a partnership exists.

Just owning property together doesn’t mean there’s a partnership, even if profits are shared.

Sharing gross returns also doesn’t mean there’s a partnership.

Getting a share of business profits usually means someone is a partner (with some exceptions).

Partners are jointly responsible for the partnership’s debts and any wrongdoings (sections 12 and 13 of the Partnership Act). Because of this, it’s very important that partners trust each other. This trust is the foundation of the “fiduciary duties” between partners.

Partnership Disputes

Written partnership agreements usually cover important issues. For example, when the partnership can end, what happens if it does, and how to resolve arguments.

Disputes are common in partnerships for various reasons. They have to be honest and fair with each other, called “fiduciary duties.” This means they can’t take advantage of their partnership or use it to benefit themselves without their partner’s full permission. In some cases, even with permission, they can’t profit from certain situations. For instance, a lawyer buying property from a client in financial trouble at a low price.

Many arguments in partnerships happen because a partner didn’t follow these fiduciary duties.

Example of Partnership Disputes

If a partner takes a benefit or opportunity that should belong to the partnership, they are breaking the rules. For example, if a partner in a toy distribution business gets a message from a new toy maker. But then, he arranges for his wife’s company to get the exclusive rights to distribute those toys. It means he is taking an opportunity that should have been for the partnership. In this case, the partner might have broken his duties to his partners. Also, his wife and her company could be liable for being part of that breach.

If someone uses information from partnership discussions to benefit themselves, they are breaking the rules. For example, if two real estate agents are planning to start a business together and one of them, Partner B, learns about Partner A’s clients and fees during their discussions. Then, if Partner B backs out of the partnership talks and offers those clients lower fees to steal them away, this is potentially a breach of fiduciary duties.

Fiduciary Duties

A partner borrows money against the security of property owned in its own name, but in fact owned by the partnership, without the consent of his partners;
Partner pays their personal expenses with partnership money;
A partner (without permission) uses partnership property for their own benefit;
Partner receives property that is due to the partnership and does not account to his partners for it.

A breach of fiduciary duties often starts small. If not addressed, it can grow into a big problem involving a lot of money. It can also damage the relationship between partners, leading to a partnership dispute.

Finally, these problems can be solved with the involvement of a partnership dispute lawyer.

Contact QBM Business Partnership Dispute Lawyer

QBM Lawyers have extensive experience in litigating partnership disputes and their resolution. For advice about partnership disputes and dispute resolution, contact our business partnership dispute lawyer Justin Mathews at justinm@qbmlaw.com.au or Peter Muller at peterm@qbmlaw.com.au