At its best, a business partnership represents a potentially volatile situation that can strengthen or weaken a company. The dissolution of a business partnership often involves all of the tension and drama of a contested divorce.

Many pitfalls exist in these relationships. Education and a solid legal contract provide strategies to make the most of a partnership.

Reasons to avoid a partnership

Entrepreneur claims that business partnerships fail for one major reason: resentment. One cause of resentment involves a disparity in the work ethic between partners. This happens when one partner works harder than the other. The inevitable result: resentment from the party that puts in more hours. A second cause of friction occurs when partners hold conflicting visions for the company. This can happen for many reasons and take on many forms such as bitter arguments over small details. In the end, it probably comes down to control. For this reason, a business person should consider other options besides a partnership, such as hiring key personnel on an hourly or salary arrangement.

Reasons to seek a partnership

Sometimes a business partnership works perfectly, at least for a number of years. Entrepreneur ranks the best business partner duos of all time. William Proctor and James Gamble of Proctor & Gamble developed a successful company in the middle of a recession when they decided to stop competing against one another and work together. Henry Wells and William Fargo founded both Wells Fargo and American Express. John D Rockefeller and Henry Flagler created Standard Oil and built it into a multi-billion dollar company.

Entering into a business partnership raises many complicated concerns. This relationship ranks as one of the most common reasons for business lawsuits.