A conflict with a business partner can have major consequences for your business. When the collaboration stalls, decisions are no longer made, or trust is lacking, not only the relationship but also the company comes under pressure. In this article you will read what you can do in the event of a conflict with your business partner, what legal options exist, and how you can limit further damage.
When is there a conflict with a business partner?
A conflict with a business partner exists when partners fundamentally disagree about the direction, decision-making, or the implementation of agreements. This occurs with partners in a general partnership (VOF), shareholders in a private limited company (BV), and collaboration partners without a formal structure.
Common causes are:
- differences of opinion about strategy or investments;
- unequal commitment or division of tasks;
- discussions about profit distribution;
- lack of transparency;
- personal tensions that carry over into business.
Why a conflict with a business partner is so impactful
An escalating conflict with a business partner directly affects the core of the company. Decisions are postponed, employees sense tension, and external parties lose confidence. In practice, we see that entrepreneurs often hope for recovery for too long, while timely intervention is crucial.
What does the contract or agreement say?
The first step in a conflict with a business partner is reviewing the legal agreements. Consider:
- shareholders’ agreement;
- partnership agreement;
- articles of association;
- management agreements.
These often contain provisions on decision-making, dispute resolution, and termination of the collaboration. These agreements largely determine your legal position.
Conflict with business partner: practical options
1. Initiate the conversation
At an early stage, an open conversation can prevent escalation. This requires both parties to be willing to put business interests above emotions.
2. Documenting agreements
When parties still want to work together, documenting revised agreements can help create clarity and prevent further conflicts.
3. Negotiating termination
If continuation is not feasible, a controlled termination of the collaboration can limit the damage. Consider an exit, sale of shares, or transfer of tasks.
4. Legal steps
When consultation does not provide a solution, legal action may be necessary. In a dispute with a business partner this may involve compelling disclosure of information, annulling resolutions, or initiating legal proceedings.
What if your business partner blocks everything?
In some situations, a dispute with a business partner leads to complete deadlock. We often see this with 50/50 ownership structures. Without clear agreements, this can paralyze the business. Legal intervention may then be necessary to force a breakthrough.
International collaborations
In international enterprises, a conflict with a business partner appears more complex. Different legal systems, cultural differences, and language barriers then play a role.
General information about doing business and collaboration can be found at the Chamber of Commerce.
Common mistakes in conflicts between business partners
- waiting too long to intervene;
- letting emotions prevail over business interests;
- not seeking legal advice;
- making informal agreements without documentation;
- litigating without a strategy.
What can Arslan Advocaten do for you?
Arslan Advocaten assists entrepreneurs with a dispute with a business partner We assess your legal position, advise on solutions, and guide negotiations or proceedings when necessary.
Also read more about our expertise in business law and international commercial disputes .
Costs and litigation funding in commercial disputes
In conflicts between business partners, we in principle work not on a no cure no pay basis. Commercial disputes require a careful assessment.
In certain cases it can be considered whether litigation funding is possible. We work with an independent litigation funder who – after review – may be willing to (partially) finance the attorney’s fees.
About the author
This article was written by Onur Arslan, attorney and founder of Arslan Advocaten. He specializes in commercial disputes, including disputes between business partners and shareholders.
Would you like to discuss how your dispute with your business partner can be resolved legally?
