How to Handle Texas Business Partner Disputes

 Posted on July 09, 2025 in Business and Commercial Law

Most business partnerships begin with shared dreams and goals, yet over time, disagreements between partners can arise. Whether over money, business responsibilities, or the direction of the company, shared goals can often give rise to disputes. Some of these disputes can be resolved, while others can quickly escalate into legal battles if not addressed strategically.

If you are struggling with your Texas partnership, knowing your legal options is crucial to preserving your business and protecting your interests. Having a Hill County, TX business law attorney looking out for those business interests can truly make a difference in business partner disputes.   

What Are the Most Common Causes of Partnership Disputes?

There are many different reasons for partnership disputes, including the following:

Roles and Responsibilities of the Partners are Poorly Defined

When partners do not clearly understand their obligations and duties, crucial business tasks can be neglected, efforts duplicated, and the partners may feel confused and frustrated. In particular, when one partner feels he or she is carrying more of the workload than the other, resentments can build.

Financial Disagreements Between Partners

Perhaps one of the biggest issues between business partners revolves around money. There may be disagreements regarding day-to-day expenses, investment strategies, or profit distribution, which can result in perceptions of unfairness or actual unfairness.

There are Communication Issues Between the Partners

Communication is the key to any relationship, including business partnerships. Unresolved conflicts, misunderstandings, and unmet expectations can result from communication failures. It is not always easy for business partners to communicate honestly with one another. When there is a lack of transparency regarding financial matters or partners fail to discuss important decisions, distrust and resentment can arise.   

The Partners Have Differing Visions for the Company’s Direction

Partners often fail to fully discuss their visions for the company, including growth strategies, overall direction, and investment priorities. When the partners have conflicting views on the best way to achieve business goals, the partnership can face troubles.

The Partners Have Lost Trust in One Another

The entire business partner relationship can be undermined when there is a lack of trust between the partners. Concerns regarding financial transparency, past conflicts, or a perceived lack of commitment to the partnership can erode trust, leading to a loss of trust.

There Has Been a Breach of Fiduciary Duty Between Partners

Fiduciary duty requires partners to act in the best interests of the partnership, avoiding any conflicts of interest. Disputes between the partners can occur when one partner consistently acts in his or her own best interests instead of the interests of the partnership. This can also lead to serious financial and legal consequences for the business.  

What Are the Best Methods for Resolving Partnership Disputes?

Resolving a partnership dispute can take many forms, depending on the extent of the dispute. In some cases, internal discussions and informal negotiations facilitated by a business law attorney or through mediation may help resolve the disputes. If a resolution between the partners is simply not possible, a lawsuit may be filed in a Texas state court.

When Is It Time to Dissolve the Partnership?

A Texas partnership can be dissolved for various reasons, including:

• Mutual agreement as outlined in the partnership agreement or a separate agreement
• Fulfillment of a specific purpose for which the partnership was formed
• The death or withdrawal of a partner
• Business insolvency or significant financial losses
• Partner misconduct, including violations of the partnership agreement
• A court order is issued when one partner demonstrates that the other partner’s conduct is harmful to the business
• The business becomes illegal, triggering dissolution
• Expiration of a specified term

Contact a Tarrant County, TX Business Law Attorney

If you are facing a business partner dispute in the state of Texas, you do not have to navigate the process on your own. Having a knowledgeable Hood County, TX business law attorney from Cain & Kiel Law can ensure that you understand your rights, carefully evaluate your legal options, and pursue a solution that will protect your business.

Attorney Cain is a certified mediator, the owner of Trinity Abstract & Title in Cleburne, and has served as the mayor of Cleburne since 2012. Call 817-645-1717 to schedule a consultation and take the first step toward resolving your partnership conflict.