How to Handle Business Partner Disagreements and Conflicts

Published on January 10, 2026

Business partnerships thrive on collaboration, but disagreements are inevitable. When conflicts arise between partners, how you handle them determines whether your business survives or falls apart. Understanding your options and acting strategically protects both your investment and the business itself.

Common Causes of Partner Disagreements

Strategic Direction: Partners disagree about where the business should go – expanding into new markets, hiring staff, taking on debt, or changing the business model.

Financial Issues: Disputes over profit distribution, personal draws, expense reimbursements, or one partner contributing less financially than agreed.

Work Contribution: One partner feels they’re doing all the work while the other coasts. Unequal effort creates resentment and conflict.

Decision-Making Authority: Disagreements about who has authority to make certain decisions, especially when the partnership agreement is vague or nonexistent.

Personal Conflicts: Personality clashes, communication breakdowns, or loss of trust that makes working together difficult.

What to Do When Partners Disagree

Address Issues Early: Don’t let disagreements fester. Small problems become major conflicts if ignored. Have direct, honest conversations as soon as issues arise.

Review Your Partnership Agreement: Check what your agreement says about decision-making, dispute resolution, and resolving deadlocks. Many agreements include mechanisms specifically designed for handling disagreements.

Document Everything: Keep records of disagreements, decisions made, communications, and any problematic behavior. This documentation becomes crucial if disputes escalate.

Legal Options When Conflicts Escalate

Oppression Remedy: If your partner is acting oppressively or unfairly disregarding your interests, you can seek an oppression remedy. Courts can order various remedies including buyouts or changes to business operations.

Dissolution: When partnerships become unworkable, you can seek court-ordered dissolution. The business is wound up and assets distributed according to partnership interests.

Breach of Partnership Agreement: If your partner violates the partnership agreement, you can sue for breach of contract and seek damages or specific performance.

Derivative Action: If your partner’s conduct harms the business, you may be able to sue on behalf of the business to recover losses.

Contact Pinto Shekib LLP, Your Toronto Shareholder Litigation Lawyers

Early legal advice helps you understand your rights, protects your interests, and often resolves conflicts before they become expensive litigation.

Some situations indicate the partnership may be beyond repair: complete breakdown of trust or communication, fundamental disagreement about business direction, one partner actively harming the business, threats or hostile behavior, or financial impropriety or dishonesty.

When these warning signs appear, focus on exit strategies rather than trying to salvage the relationship.