Your business partnership started with a shared vision and enthusiasm, much like a marriage. But as many business owners know, partnerships can sour, making your daily operations a nightmare.
If you find yourself as a minority owner or majority shareholder in an unhappy ‘corporate marriage,’ your financial future and mental health could be at stake. In situations like these, you may need the advice of an experienced business dispute lawyer.
The process of terminating a business, whether it’s an LLC (Limited Liability Company) or close corporation, is far from straightforward. It is more complex to navigate continued business operations, company assets, corporate employment, trade secrets, non-compete agreements, and nonsolicitation agreements. Moreover, legal claims against your business partner, such as breaches of fiduciary duty, shareholder duty, or even fraud, add another layer of complication.
A roadmap to distance yourself from a toxic business partner can be unclear with all these complexities. However, in many cases, the buyout of an LLC Member’s interest can expedite the process and preserve the business’s value.
Your LLC Operating Agreement or Corporation Shareholder Agreement may contain specific provisions for this. If your business operates under Massachusetts law, Delaware law, New York law, or some other state law, consider consulting your CPA and a professional business litigation attorney for guidance.
Legal action might be an avenue to explore. A well-crafted legal demand letter or a strategic civil lawsuit against your business partners could lead to a favorable resolution. Keep in mind, lawsuits can be a double-edged sword. They’re not only financially taxing but can also affect your mental health and quality of life.
It might be tempting to try and solve these issues yourself. While it could save upfront costs, the potential pitfalls make this a risky approach. At the very least, consider engaging with an expert business dispute lawyer and a trusted CPA before making any decisions.
Breaking away from a toxic business partnership can be tough. But with the right guidance, it can also be a pivotal step towards securing your financial and mental health. Sometimes, breaking up is the only path to a more profitable and peaceful future. Pick a lawyer with the right experience and one who will understand your business and your concerns.
By Adam P. Whitney, [email protected] 617.338.7000