When you aren’t the only person involved in running a business, it’s almost inevitable that there will be times at which disagreements surface between you and the other parties in charge of management. It’s unreasonable to expect that you’ll agree on every topic – everybody knows best how to do things their own way. But when issues between partners or shareholders arise that are difficult or impossible to resolve, it’s crucial that you’re aware of the best methods of ensuring the security of both yourself and the business question.
When you and your partner created your company, chances are that you both establish ed the terms of the management logistics in some form of initial documentation. But this is not necessarily the case, as drafting a contract of agreement is not legally required for partnership businesses. It’s certainly a better idea to lay down the rules in a contract during the formation process. Doing so will protect both of you in the event of future disagreements, relieving potential tension and discouraging the likelihood that lawsuits will be necessary if disputes do come into play. If no such documentation exists, however, then either partner is legally permitted to withdraw from the partnership and sell his or her interest.
In a partnership situation, either individual is entitled to access to any and all information regarding the function of the business. Lawsuits for dissolution may be filed in the event of attempted exclusion of a partner on behalf of the other.
Things are more complicated for corporate shareholders. If a shareholder believes that he or she hasn’t been receiving due payments, state courts will determine whether they are eligible for compensation for exclusions based on their discretion.
Depending on the circumstances, minority shareholders who can prove that they are being oppressed by the majority shareholders in the management of the company might be able to convince the court to liquidate it. Such persons must be able to prove that their expectations are reasonable. Even those who are not actually minority shareholders and can claim a fifty percent value of a company are able to file for dissolution.
Minority shareholder, although the “underdogs” in dissolution suits, are not necessarily justified in their legal actions. Majority shareholders defending themselves against accusations of oppression are permitted to dispute the claims. An individual majority shareholder or the business itself may also purachase the interests of the minority shareholder claiming oppression. Even those who are not actually minority shareholders and can claim a fifty percent value of a company are able to file for dissolution.
At Turner Law Offices, P.C., we know how tough it can be to manage a company alongside conflicting parties. Our team of attorneys has years of experience resolving, preventing, and simply mediating partners and shareholders in such situations. Simply put, we know how to guarantee the best outcome under most any circumstance. Call today or go online to set up your Free Initial Consultation and get on track toward assuring the ideal resolution.