A conflict with a business partner can have major consequences for your company. When cooperation breaks down, decisions are no longer made or trust is lacking, not only the relationship but also the business 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 are available and how to limit further damage.
When is there a conflict with a business partner?
A conflict with a business partner arises when partners fundamentally disagree about the direction, decision-making or execution of agreements. This occurs among partners in a general partnership (VOF), shareholders in a private limited company (BV) and cooperation partners without a formal structure.
Common causes include:
- differences of opinion about strategy or investments;
- unequal effort or division of tasks;
- disputes about profit distribution;
- lack of transparency;
- personal tensions that affect business.
Why a conflict with a business partner is so drastic
An escalating conflict with a business partner directly affects the core of the business. Decisions remain pending, employees notice tension and external parties lose confidence. In practice, we see that entrepreneurs often hope for recovery for too long, while timely intervention is precisely crucial.
What does the contract or agreement say?
The first step in a conflict with a business partner is to examine 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 cooperation. These agreements largely determine your legal position.
Conflict with a business partner: practical options
1. Opening a dialogue
At an early stage, an open conversation can prevent escalation. This requires willingness from both parties to put business interests above emotions.
2. Recording agreements
When parties still wish to cooperate, recording adjusted agreements can help create clarity and prevent further conflicts.
3. Negotiating termination
If continuation is not feasible, a controlled termination of the cooperation can limit the damage. Consider withdrawal, sale of shares or transfer of duties.
4. Legal steps
When consultation does not provide a solution, legal steps may be necessary. In a conflict with a business partner, this can consist of enforcing disclosure of information, annulling resolutions or initiating proceedings.
What if your business partner blocks everything?
In some situations, a conflict with a business partner leads to complete deadlock. We often see this in 50/50 partnerships. Without clear agreements, this can paralyse the business. Legal intervention may then be needed to force a breakthrough.
International partnerships
In international businesses, a conflict with a business partner becomes particularly complex. Different legal systems, cultural differences and language barriers all play a role.
General information about entrepreneurship and cooperation 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 strategy.
What can Arslan Advocaten do for you?
Arslan Advocaten assists entrepreneurs in a conflict with a business partner. We assess your legal position, advise on solutions and guide negotiations or proceedings where necessary.
Also read more about our expertise in corporate law and international trade disputes.
Costs and litigation funding in commercial disputes
In commercial disputes, we do not work on a no cure no pay basis in principle. Corporate law proceedings require a careful legal and strategic approach.
However, this does not mean you have to bear the costs yourself. In many commercial disputes, it is possible to use litigation funding.
We work together with an independent litigation funder who, after a substantive assessment of your case, may decide to pay all litigation costs. This includes, among other things:
- legal fees;
- court fees;
- any expert costs;
- costs during appeal.
If litigation funding is granted, you as a client do not have to pay these costs yourself. The litigation funder bears the financial risk of the proceedings.
The litigation funder only receives compensation upon a positive outcome, for example from (part of) the proceeds of the case. For you, this means that litigation is possible without having to incur costs in advance or during the proceedings.
Litigation funding is particularly suitable for commercial disputes with:
- a clear legal case;
- sufficient financial scope;
- a realistic chance of recovery from the opposing party.
We always first assess whether your case is suitable for litigation funding and discuss this transparently with you.
About the author
This article was written by Onur Arslan, lawyer and founder of Arslan Advocaten. He specialises in commercial disputes, including conflicts between business partners and shareholders.
Would you like to discuss how your conflict with your business partner can be legally resolved?