Dealing with a Bad Business Partner

Judicial Process of Probate

I have a business partner that is not including me in the key decisions.

Establishing a business can be quite difficult, and partnerships are often easier to enter into than incorporating. With that said, there are also some caveats that can make this option less than desirable. It is important to understand your rights as well as how to enforce them if you find yourself in a partnership that ceases to function as it should. 

Are there different types of partnerships? 

There are three main types of partnerships, and the specific kind of partnership can impact your rights:

  • General Partnership
  • Limited Partnerships
  • Joint Ventures

In general partnerships, partners divide profits and management responsibilities equally. The same is true for joint ventures, but the latter is a relationship in place for a specific amount of time. Limited partnerships, on the other hand, have different partners that are responsible for different things. One partner might be responsible for managing the business, for example, while the other invests money and has a very limited role in the management process. Limited partnerships often have more formal requirements to uphold than the other kinds of partnerships. 

How do you enter into a partnership? 

Not all business relationships must be created in writing. When it comes to general partnerships, for example, the partnership can be formed simply by two or more individuals sharing profits and working as co-owners. Note that this can also be true if you present your relationship as a partnership to the public even if you don’t consider it to be such behind closed doors. Limited partnerships are the exception and do require a formal statement listing the parties and terms of the relationship. 

Is my business partner allowed to make decisions without me? 

Partners have a duty of loyalty to each other, share in a business’ losses and profits equally, and must not make decisions that benefit one party at the expense of another. Depending upon your specific partnership and any written details you have from its inception, you may or may not have an equal right to be involved in business decisions as other partners. It is possible for a business partner to legally make decisions for the whole of a business under apparent authority, for example, but even this might not apply in certain situations. 

The best way to determine if your partnership is being upheld or if you have recourse if your partner leaves you out of key business decisions in Arizona, reach out to an experienced attorney. The attorneys at Anthony Law Group are ready to help.


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Anthony Law Group

Anthony Law Group