Partnership Dispute Lawyer in Toronto
Unlike a corporation, a partnership makes every partner personally exposed to the business and to each other. When a partnership breaks down, the legal and financial stakes are immediate. Legal Solutions Law Firm helps Toronto business partners resolve disputes, wind up partnerships fairly, and pursue accounting of partnership assets.
Why Choose Legal Solutions
Toronto's Trusted Partnership Dispute Lawyers
Partnerships Act Experience
We apply Ontario's Partnerships Act directly to your dispute, including default rules that govern partnerships without — or despite — a written agreement.
Accounting & Asset Tracing
We pursue formal accountings of partnership finances and trace partnership assets that may have been improperly diverted or withheld.
Fiduciary Duty Claims
We hold partners accountable for breaches of the duty of good faith and loyalty they owe each other under partnership law.
Efficient Dissolution Strategy
Where a partnership cannot continue, we help wind it up as efficiently as possible, protecting your share of the value built.
Overview
What Is a Partnership Dispute?
A partnership dispute arises between two or more people carrying on a business together with a view to profit, where they disagree about how the business should be run, how profits or losses should be shared, or how the partnership should end. Unlike a corporation, a general partnership is not a separate legal entity — each partner is personally liable for the debts and obligations of the partnership, and each partner can generally bind the others through actions taken in the ordinary course of the partnership's business. This makes partnership disputes especially urgent: unresolved conflict does not just threaten the business, it can expose each partner personally.
Ontario partnerships are governed by the Partnerships Act, which applies whether or not the partners have a written partnership agreement. Where no written agreement exists — a common situation, particularly among partnerships that started informally — the Act supplies a set of default rules covering profit sharing (presumptively equal, regardless of unequal capital contributions, unless otherwise agreed), decision-making, and the process for dissolving the partnership. These default rules often surprise partners who assumed their informal understanding would govern.
Where a written partnership agreement exists, it typically takes priority over the Act's default rules and governs issues such as profit and loss allocation, decision-making authority, restrictions on competing businesses, and the process for a partner to exit or for the partnership to be dissolved. Reviewing the agreement — or confirming that none exists — is always the starting point in any partnership dispute.
Partnership disputes frequently involve allegations that one partner has breached the fiduciary duties partners owe each other — duties of good faith, honesty, and loyalty in the conduct of the partnership's business. Common examples include a partner secretly competing with the partnership, diverting partnership opportunities or income for personal benefit, or excluding another partner from management and financial information. Where these breaches are established, the wronged partner can seek an accounting of partnership property and profits, damages, or dissolution of the partnership itself.
Quick Definition: Partnership
Under Ontario's Partnerships Act, a partnership is the relationship that exists between two or more persons carrying on a business in common with a view to profit. Unlike shareholders in a corporation, partners are generally personally liable for the debts and obligations of the partnership.
The Legal Framework
How the Law Works: Ontario Partnership Law
Default Rules Under the Partnerships Act
Absent a written agreement saying otherwise, the Partnerships Act provides that partners share equally in the capital and profits of the business, and must contribute equally toward losses — regardless of how much capital or effort each partner actually put in. The Act also provides that no partner is entitled to remuneration for acting in the partnership business, that decisions on ordinary matters can be made by a majority, but changes to the fundamental nature of the business require the consent of all partners, and that any partner may inspect and copy the partnership's books at any time. These default rules apply fully unless the partners have agreed otherwise in writing — which is why so many partnership disputes turn on whether an informal understanding actually modified them.
Fiduciary Duties Between Partners
Partners owe each other duties of the utmost good faith. This includes a duty to account to the partnership for any benefit derived without the other partners' consent from any transaction concerning the partnership, and a duty not to compete with the partnership business without the other partners' consent — if a partner does compete, they must account to the partnership for any profits made from that competing business. These duties exist independently of any written agreement and apply to every partner by virtue of the relationship itself.
Dissolution of a Partnership
A partnership can dissolve in several ways: by the expiry of a fixed term or completion of a specific undertaking, by any partner giving notice of intention to dissolve (where the partnership was for an undefined term), by the death or bankruptcy of a partner, or by court order. A court can order dissolution where a partner has been found permanently incapable of performing their duties, has engaged in conduct prejudicial to the business, has wilfully or persistently breached the partnership agreement, or where it is otherwise just and equitable to dissolve the partnership — including cases of irreconcilable deadlock.
Winding Up and Accounting
Once dissolved, a partnership must be wound up: its assets are used first to pay outside creditors, then to repay partners' loans and capital contributions, with any surplus distributed among the partners according to their profit-sharing ratio. Where partners disagree about the value of partnership assets, the accuracy of financial records, or whether a partner has diverted assets or opportunities, a court can order a formal accounting — a detailed review of the partnership's financial affairs to determine what each partner is actually owed.
What We See
Common Partnership Dispute Scenarios
Our Toronto partnership dispute practice handles matters including:
Timing Matters
When You Should Contact a Partnership Dispute Lawyer
Because partners can be personally liable for partnership debts, partnership disputes need attention quickly. Speak with a lawyer as soon as possible if:
Our Process
The Step-by-Step Legal Process
Free Consultation
We review any partnership agreement — or confirm none exists — and assess your rights under the Partnerships Act.
Financial & Records Review
We examine partnership financial records to identify the true state of the business and any irregularities in fund handling.
Negotiation
We pursue a negotiated exit, buyout, or resolution of the dispute wherever it can achieve a fair outcome efficiently.
Court Application (If Necessary)
Where required, we seek dissolution, an accounting, or damages for breach of fiduciary duty through the Ontario Superior Court.
Winding Up & Distribution
We oversee the wind-up of the partnership's affairs and pursue a fair distribution of assets according to each partner's entitlement.
Realistic Expectations
Possible Outcomes
Partnership disputes typically resolve through one of the following outcomes, depending on whether a written agreement exists and the nature of the conflict:
Fees & Costs
Costs and Legal Fees
Partnership disputes range from a simple, agreed exit to complex accounting litigation. We give a realistic cost estimate based on the specifics of your partnership and the dispute involved.
Got Questions?
Frequently Asked Questions
Avoid These
Common Mistakes in Partnership Disputes
Getting Started
Documents to Gather Before Your Consultation
Bringing the following to your consultation helps us assess your partnership dispute quickly and accurately:
Our Role
How Legal Solutions Can Help
Legal Solutions Law Firm represents partners in Toronto-area general and limited partnerships across a wide range of businesses. We begin by determining exactly what governs your partnership — a written agreement, or the default provisions of Ontario's Partnerships Act — since that answer shapes every option available to you.
Where a fair, negotiated exit or resolution is achievable, we pursue it directly, working to protect your financial interest in the business while minimizing cost and disruption. Where a partner's conduct requires it, we pursue formal accountings to uncover diverted funds or opportunities, and bring claims for breach of the fiduciary duties partners owe each other.
Where the partnership cannot continue, we guide clients through dissolution and winding up — including court applications where the partners cannot agree — with the goal of securing a fair and complete distribution of partnership assets.
Because personal liability is at stake in every general partnership, we move quickly to assess and address risk, protecting clients from exposure to obligations incurred by other partners during an active dispute.
Tools & Guides
Wondering what it costs to pursue an accounting or dissolution claim, or how long it might take? These free guides can help:
Our Reach
Serving Every Toronto Neighbourhood
From My Experience: The Absence of a Partnership Agreement Is the Root of Most of These Disputes
A huge share of the partnership disputes I handle share one thing in common: there was never a proper written partnership agreement in the first place. Two people started a business together, trusted each other, and never got around to formalizing what happens if things go wrong. Years later, when there is real money and real conflict on the table, they discover that Ontario's default partnership rules — equal profit sharing regardless of who put in more capital or more hours — are not what either of them actually intended.
If you take one thing from this page, let it be this: if you are in an active, undocumented partnership right now, get a proper agreement in place before a dispute happens, not after. It is far cheaper and far less painful to negotiate fair terms while you and your partner are still getting along than to litigate over what "fair" means once you're not.
On Personal Liability
Clients are sometimes shocked to learn how exposed they are to their partner's conduct. In a general partnership, your partner can generally bind the business — and by extension, you personally — to obligations in the ordinary course of the partnership's affairs, even without your knowledge. When a dispute is brewing, one of the first things I look at is whether we need to take formal steps to limit that ongoing exposure, not just resolve the underlying disagreement.
On Accounting Disputes
Accounting disputes — where one partner believes the other has been taking more than their share, or running a side business off partnership resources — are some of the most document-intensive cases I handle. They're also some of the most worth doing properly, because the numbers, once you actually dig into them, often tell a much clearer story than either partner's version of events. If you suspect something is off with the finances, don't rely on your gut — get the records and have them properly reviewed.
If your partnership is in trouble, call us before more obligations are taken on in its name. We're available 24/7 at 416-274-2222, and the first consultation is free.
Partnership Dispute Lawyer? We Can Help.
Get an honest assessment of your matter and a clear strategy — starting with a free, no-obligation consultation.
Speak With a Partnership Dispute Lawyer Today
Available 24/7. Call or text 416-274-2222, or send us a message and we will respond promptly.