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5 common causes of partnership disputes

Business partnerships are complex. No matter how strong your connections are, disputes may still occur within your company. Unresolved partnership disputes can disrupt the daily operations of your business and even lead to failure. 

But why do partnership disagreements happen? Here is a look at the most common reasons business partners argue.  

1. Using company assets for personal purposes

If someone uses business assets for personal use, it can result in a clash between partners. For example, a partner could use a company vehicle for a personal road trip or use business funds to cover a personal expense. 

2. Financial obligations and rights

Arguments about money are common in the business world. These arguments usually arise when a company is going through a financial lull. If partners disagree how profits are shared and liabilities are handled, a substantial dispute is likely to result. 

3. Utilizing partnership resources

Business partners often disagree how to use company income. Perhaps one partner thinks the business should run a radio advertisement but another thinks billboard advertising is better. Or one partner wants to rent a more luxurious office space while another prefers to stay in a cramped space to save money.

4. Poor boundaries

In an attempt to make things equal, a partnership may try to not clearly delineate authority. However, this usually leads to one of two scenarios: nothing getting done or boundaries being constantly broken. Partners should have specific roles and responsibilities. 

5. Different philosophies and goals

According to Forbes, partnership disputes often occur due to different strategies and visions. This is especially true when it comes to company culture, branding and growth objectives. If partners cannot agree on where the company should go, the business could split up. 

If you are a business owner, you should keep these things in mind. Anticipating disputes can help you avoid or resolve them.

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