At the Spencer Law Firm, we are business owner dispute attorneys. Business owner disputes comes in all forms. Most arise in smaller companies, partnership and closely held companies with few owners. Generally, business owner disputes emerge when owners have different opinions regarding major business decisions and financial incentives are involved.
Business Owner Rights and Remedies
When a dispute arises, a business owner’s options depend on the facts and circumstances of the dispute. Most of the time business owners are subject to some sort of contractual arrangement. Many come in the form of a company agreement with some sort of voting arrangement, shareholder agreement, terms and conditions for resolving a dispute, dispute resolution methods and other contractual dispute resolution procedures. It is important that business owners know the terms of any contractual obligation they are bound by, especially on the precipice of a major dispute. Additionally, the structure of the company may affect an owner’s ability to resolve a dispute, especially those with majority or minority control.
Prevention
The best way to prevent business owner disputes is to have all dispute resolution procedures, rights, obligations and remedies outlined from the beginning of the business relationship. Business owners in partnerships, limited liability companies and corporations should maintain copies of such fully executed contractual agreements. Those contracts may include operating procedures, management procedures, indemnification provisions, voting mechanisms, cash call payments, contributions and distributions. They may also include specific owner responsibilities, buyout provisions, withdrawals and dissolution provisions, employment agreements, economic rights and distributions, non-compete, non-disparagement clauses, different ownership classes, buyout and transfer of ownership provisions.
Resolutions
Sometimes a business owner’s original governing document do not address the dispute resolution process. Alternatively, the dispute resolution procedures do not resolve the business owners’ dispute. In that case, seeking immediate legal counsel is the best option for avoiding litigation or other negative outcomes. A lawyer, like those at the Spencer Law Firm, can help a business owner navigate through the executed contractual agreements and their terms to assist in developing legal options and resolutions. Any dispute resolution will depend on the facts, circumstances, risks and desired goals of the business owner. Depending on the case, a dispute may be resolved altogether with some simple negotiation or face to face discussion. Litigation should always be a last resort amongst business owners.
If there is a betrayal of trust and duties owed by one business owner to another, then litigation may be the only option. This is especially true when fraud, deceit, theft or material breaches of a contractual agreement. Even after such betrayal, sometimes, it is in the best interest of the company and the business owners’ interest to resolve the dispute without litigation. Again, it all depends on the facts and goals of each business owner. However, business owners should always consult an attorney before agreeing to settle any and all disputes.
If you have any questions, concerns or comments regarding business owner disputes or potential business owner disputes, please do not hesitate to contact us or give us a call at (713) 568-9008.