Traditional partnerships enjoy a level of confidentiality that is unavailable to limited companies with no requirement for published accounts or for accounts to be audited. However, the lack of a distinct legal identity coupled with lighter touch regulation and the competing demands of partners has the potential to cause or aggravate partnership disputes.
Despite a limited liability partnership (LLP) being a body corporate which is required to publish its accounts, the relationship between the LLP members is still governed by private agreement. A well drafted LLP agreement may alleviate but can never eliminate the scope for disputes between members.
There are countless causes for partnership disputes. At the outset there may be a dispute as to whether a partnership exists at all. If a partnership or LLP does exist there can be disputes over the rights and obligations between partners and members. Finally disputes may arise between partners and members on the winding up of a partnership or LLP.
In the context of partnership disputes our team of specialist partnership lawyers regularly advises firms on a wide range of issues including:
- the existence of a partnership – are persons carrying on business with a view of profit? If so, what are the rules for sharing profits and what does the partnership agreement or LLP agreement say?
- has a breach of the partnership agreement or LLP agreement occurred? For example, has a former partner breached any restrictions on competition? If so, what common law, equitable or statutory rights are available to the continuing partners, members or the LLP?
- dispute clauses, arbitration, mediation and expert determination
- negotiation and mediation
- court practice and procedure – jurisdiction, pre-action procedure, commencement of proceedings, case management and costs
An early and full understanding of any dispute coupled with knowledge of the legal duties that partners and members owe to both one another and to the firm can mean the difference between a disagreement that is easily resolved and costly litigation or, perhaps worse still, the dissolution of a firm where the partners cannot agree to continue to carry on business.
How Fox & Partners can help…
- we aim to provide early, cost-effective advice to clients embroiled in partnership disputes on the strengths and weaknesses of their positions
- we provide clear guidance on court practice and costs from pre-action compliance to trial
- we are ever mindful of the need to minimise our clients’ costs.
Please call us on 020 7618 2400