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Partnership Dispute
Gold Coast business lawyers
If you are dealing with a business partnership dispute, QBM Lawyers can assist.
We advise on partnership disputes and disagreements, helping to resolve conflicts, renegotiate terms and protect your commercial interests.
Our focus is on achieving practical outcomes while maintaining business relationships where possible.
What is a partnership?
A partnership is generally an arrangement between two or more people or entities to carry on a business, and in some cases, to own property.
Partnerships can exist between companies, trustees, individuals, or a combination of these. In some cases, an agent may be appointed to act on behalf of the partners or hold property.
A partnership is different from a company structure. In some situations, a “quasi partnership” may arise where key individuals are integral to the business. In other cases, rights are derived from share ownership or directorship, and a partnership does not exist.
Partnership agreements may be written, but they can also be formed through verbal agreements, written correspondence, or conduct.
Rules to assess if a partnership exists
In Queensland, the Partnership Act 1891 sets out the rules for determining whether a partnership exists.
Owning property together does not necessarily establish a partnership, even where profits are shared. Similarly, sharing gross returns does not of itself create a partnership.
Receiving a share of business profits is generally an indicator that a partnership exists, subject to some exceptions.
Partners are jointly responsible for the partnership’s debts and obligations, as well as any wrongdoing under sections 12 and 13 of the Partnership Act. For this reason, trust between partners is essential and forms the basis of their fiduciary duties.
Partnership Disputes
Written partnership agreements typically address key issues, including when a partnership may end, what occurs on termination, and how disputes are resolved.
Partners owe each other fiduciary duties, requiring them to act honestly and in good faith. This means they must not take advantage of the partnership or use it for personal benefit without full consent. In some circumstances, even with consent, certain benefits may not be permitted.
Many partnership disputes arise where a partner fails to comply with these fiduciary obligations.
Example of partnership disputes
If a partner takes a benefit or opportunity that properly belongs to the partnership, this may constitute a breach of duty. For example, if a partner in a distribution business secures exclusive rights through a related entity, this may amount to taking a partnership opportunity. In such cases, both the partner and any associated entity may be liable.
Similarly, using information obtained through partnership discussions for personal gain may amount to a breach. For example, where one party uses confidential client or pricing information to compete directly with the partnership, this may give rise to a claim.
Fiduciary duties
- A partner borrows against property held in the partnership’s name without the consent of the other partners;
- A partner uses partnership funds for personal expenses;
- A partner uses partnership property for personal benefit without permission;
- A partner receives partnership property and fails to account to the other partners.
Breaches of fiduciary duties often begin as minor issues but can escalate into significant financial disputes if not addressed. They can also damage the relationship between partners and lead to formal disputes.
These issues can often be resolved with the assistance of an experienced partnership dispute lawyer.
Contact QBM business partnership dispute lawyers
QBM Lawyers has extensive experience in partnership disputes and their resolution. For advice, contact Justin Mathews at justinm@qbmlaw.com.au or Peter Muller at peterm@qbmlaw.com.au
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Protect Your Business Interests With Experienced Gold Coast Business Lawyers
Partnership disputes can escalate quickly. QBM Lawyers provides clear, practical advice to help resolve conflicts and safeguard your commercial interests.
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Frequently Asked Questions
A partnership is generally an arrangement between two or more people or entities carrying on a business together with the intention of making a profit. Whether a partnership exists depends on the specific circumstances, including how the parties operate and share profits.
No, a written agreement is not required for a partnership to exist. Partnerships can arise through verbal agreements, conduct or informal arrangements, which can sometimes make disputes more complex.
Common issues include disagreements over business decisions, misuse of partnership funds or assets, breaches of fiduciary duties, and disputes over profits, roles or exit arrangements.
Partners owe each other duties to act honestly, in good faith, and in the best interests of the partnership. This includes not taking personal advantage of partnership opportunities or using partnership assets without consent.
A breach of duty may give rise to legal action, including claims for compensation or recovery of benefits obtained improperly. Early legal advice can help assess your position and available remedies.
Yes, many disputes can be resolved through negotiation or restructuring arrangements. Our focus is on achieving practical outcomes while preserving business relationships where possible.
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For over 40 years, QBM Lawyers has delivered effective legal solutions for clients across the Gold Coast.
We understand our clients’ goals, recognise the challenges they face, and provide clear, practical advice to support their commercial objectives.
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- +61 755 74 2600
- PO Box 6344, Gold Coast Mail Centre, Bundall QLD 9726
- Level 5, Evandale Place, 142 Bundall Road, Bundall, QLD, Australia
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