Understanding the situation
Disagreements between business partners often start small — a difference of opinion about spending, a missed update, a decision taken without consultation — and grow if they are not addressed. In a company structure, the underlying rights and obligations are usually set out in the memorandum of association and any shareholders' agreement, so it helps to know what those documents actually say before assuming a position is right or wrong.
What options are realistic depends on the size of the disagreement, whether money has already changed hands, and whether the partners still want to continue working together.
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Steps to consider
- Request a calm, documented conversation focused on the specific issue rather than the relationship generally.
- Ask for and review the relevant financial records, resolutions or correspondence.
- Consider putting your concerns in writing so there is a clear record of what was raised and when.
- Explore a settlement or mediated discussion, particularly if the partners intend to keep working together.
- If the disagreement cannot be resolved directly, take advice on the options available under the company's documents and the applicable procedure.
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Preserving the business while the issue is resolved
Where possible, day-to-day operations and existing commitments are best kept running normally while a disagreement is worked through, since disruption can affect employees, clients and the value of the business itself.
- Avoid unilateral changes to bank mandates, signatories or access without a documented basis.
- Keep clear records of decisions taken during the disagreement period.
- Communicate with staff and key clients only as needed, and consistently between partners.
