Litigation & disputes
Partnership disputes in Victoria.
Partnerships fail quietly for years before they fail loudly. CMK Legal in Richmond acts for partners in professional practices, trades businesses and family partnerships across Victoria, on profit share, unequal effort, exit terms, dissolution and the taking of accounts.
Merits assessed first
Entitlements calculated from the accounts, not from what each partner believes they are owed.
Early resolution preferred
Urgent steps taken where drawings, clients or partnership assets are moving.
Costs kept proportionate
Fixed fee for the position review, with estimates for negotiation and any proceedings.
Victorian courts & VCAT
Partnership Act 1958 (Vic), fiduciary duties and Supreme Court practice.
What a partnership dispute involves.
A partnership exists wherever two or more people carry on a business in common with a view to profit, whether or not anything was signed. Where there is no written agreement, the Partnership Act 1958 (Vic) supplies default rules: equal profit share, equal management rights, no entitlement to a salary, and the right of any partner to dissolve a partnership at will on notice.
Those defaults surprise people. A partner who contributed most of the capital, or who does most of the work, has no automatic right to a greater share without an agreement. Equally, a partner who wants out can usually trigger dissolution unilaterally, which forces a realisation of the business unless the others buy them out.
Partners owe each other fiduciary duties, good faith, full disclosure, accounting for private profits and not competing with the firm. Most partnership disputes are, in substance, a claim that one partner has taken more than their share: drawings above entitlement, work diverted to a private entity, or use of partnership assets and goodwill for their own benefit.
Personal liability is the risk that separates a partnership dispute from a company one. Partners are jointly liable for partnership debts, so continuing to trade through an unresolved dispute can expose your personal assets. Deal with the banking, the leases and the supplier accounts early.
How we approach a partnership dispute.
Establish the terms of the partnership
A written deed, an old letter, or nothing at all. Where there is no agreement, the Partnership Act defaults apply and they are often very different from what the partners assumed.
Reconstruct the accounts
Capital accounts, drawings, loans, unbilled work in progress and goodwill. Most disputes narrow substantially once the numbers are properly reconciled by the accountant.
Negotiate an exit rather than a dissolution
Dissolution destroys value. A buy-out of the outgoing partner's interest, with client and staff transition agreed, almost always yields more for everyone involved.
Dissolution and accounts where needed
Where the relationship cannot continue, we act on dissolution, the appointment of a receiver if necessary, and the taking of accounts through the Supreme Court.
Talk to us if.
- One partner is drawing more than their entitlement
- You are doing most of the work for an equal share
- There is no written partnership agreement and the relationship has soured
- A partner is diverting clients or work to another entity
- You want to exit and cannot agree on a value for your interest
- A partner has given notice of dissolution
- Partnership debts, guarantees or a lease are exposing you personally
- A partner has died, retired or become incapacitated
Bring any partnership deed, the last two years of financial statements and the current partner drawings schedule. Most of the advice follows from those.
How a partnership dispute runs.
- 01
Position review
We identify the governing terms, deed or statutory defaults, and your entitlements and exposures.
- 02
Accounts and valuation
Capital accounts, drawings and work in progress reconciled, with a valuation of the partnership interest.
- 03
Proposal and negotiation
An exit or restructure proposed, covering price, timing, clients, staff, premises and guarantees.
- 04
Mediation
A structured mediation to resolve valuation and transition, which is where most matters conclude.
- 05
Dissolution or proceedings
Where agreement fails, dissolution, a receiver and the taking of accounts through the Supreme Court.
Transparent dispute fees.
The position review and advice on entitlements and options are a fixed fee quoted before we begin. Negotiation, mediation and any proceedings are estimated stage by stage. Accountant and valuer fees are disclosed separately, and we work with your existing accountant wherever possible to avoid duplication.
FAQs
Partnership dispute FAQs.
Still unsure? Call us on (03) 9008 7224 and speak to a lawyer, not a call centre.
We never signed anything. Are we still partners?
Can one partner force the partnership to end?
I contributed more capital. Do I get a bigger share?
Can a partner compete with the partnership?
Am I personally liable for partnership debts?
What is an account of profits?
Related services.
Shareholder disputes
Oppression, deadlock, exclusion and buy-outs between the owners of a company.
Learn moreContract disputes
Breach, termination, damages and recovery when the other side does not perform.
Learn moreMediation & dispute resolution
Structured negotiation and mediation to resolve matters before costs escalate.
Learn moreSort out the partnership.
Send us the contract, the correspondence or the notice you have received. Start online in a few minutes, or book a consultation and speak to a disputes lawyer the same business day.