Your business partner making decisions without you can impact your role and company success. Assess your partnership agreement, document exclusions, and seek legal advice to protect your interests.
By Brad Nakase, Attorney
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An important part of any successful business partnership is open dialogue and trust. But what if your business partner begins to make major decisions independently of you? Eliminating your voice from crucial decision-making processes can have a negative impact on your role in the company and its success. This includes things like changing passwords, excluding you from key strategic choices, and deciding on financial matters.
It is critical to be aware of your rights and legal choices when partners begin to make decisions without consulting you. In this article, we will discuss your options in the event that your partner has excluded you from their business, including legal remedies and the role of a commercial litigation lawyer in safeguarding your interests.
Unless otherwise specified in the partnership agreement, it is customary for both partners to be involved when making major decisions. A well-written partnership agreement will specify the duties and authority of each partner and the procedure for making decisions. Unless otherwise specified in the agreement, one partner cannot unilaterally remove another from the company or their ability to participate in decision-making.
But, in order to seize control of the company, some partners may use dishonest or even unlawful means. Possible strategies in this regard are:
As soon as you realize you’re in this predicament, you must act swiftly to safeguard your interests.
Here are some things you can do right away if your business partner is ignoring you:
1. Take a look at your partnership contract
See if there are any provisions in the agreement regarding the resolution of disputes. In order to avoid litigation, many contracts contain “dispute resolution” provisions that stipulate the parties must first attempt mediation or arbitration to settle their differences. In the event that such a provision is present, the procedure as laid out may be required of you.
If there is a clause like this, you might need to follow the steps mentioned.
2. Provide evidence of exclusion
Get the ball rolling on collecting proof of exclusion, like ignored messages or actions, like changes to account details or system access. In the event that legal action is necessary, this documentation will play a pivotal role.
3. Get in touch with a business litigation attorney
It is wise to seek legal counsel before proceeding. If you need assistance with any legal matters, an experienced business lawyer can explain your rights, give you advice, and guide you through the process.
You have a number of legal options at your disposal if your partner’s behavior infringes upon your rights or the terms of your partnership agreement. Issues arising out of partnerships often include the following claims and remedies:
1. Violating the terms of partnership
You might have a case for breach of contract if your partner does anything that goes against the partnership agreement. This may necessitate going to court to get the agreement’s provisions enforced or to sue for damages.
2. Fiduciary Duty Breach
As a matter of good faith and for the benefit of the company, partners have an obligation to each other known as a fiduciary duty. A possible violation of this obligation would be to exclude you from the company. Here are some examples:
If your partner’s actions have harmed you, you may be able to sue them for damages and breach of fiduciary duty.
3. Dispute Resolution
You might be eligible for a variety of remedies, such as:
It can be particularly difficult to navigate a partnership dispute when one party is ignoring the other’s rights. A business litigation attorney can be of assistance by:
A lawyer will fight for your rights and get you the best result possible, regardless of whether mediation or arbitration is necessary.
You must move swiftly if your business partner is excluding you from decision-making. You can safeguard your interests and prevent unjust exclusion from the company by following the procedures outlined in your partnership agreement or by taking legal action.
Get all of your paperwork in order, talk to a business litigation attorney, and research your options. You can resolve the matter and protect your business interests with the help of a competent attorney.
Have a quick question? We answered nearly 2000 FAQs.
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