In today's Freedom Friday blog and email newsletter, I want to talk about another topic that I get asked about from time to time, and that is partnership disputes, and what's involved in them.  Sometimes this comes up with someone who is a member of an LLC, and they are having issues with the other owner of the LLC, or even an actual business partnership that's going south, and how the partner can protect its interests and rights.  So, in today's Freedom Friday blog and email newsletter, I'm answering the question, “What are the nuts and bolts of a partnership dispute in Oklahoma?”

If you believe that your business partner is causing an issue or creating a dispute within your company, the first thing you should do, if you are able to do so, is to collect documents and be organized.  Again, this is if you are able to do so.  If the problem is you are not being provided access to the business records and accounting records of the business, then you need to consider hiring an attorney to assist you in that process.  However, every business owner should maintain an organized file of all the business agreements, contracts, recording, accounting records, etc.  You need to have copies of the LLC Operating Agreement, partnership agreement, or corporation's bylaws, if they exist, for when you consult with an attorney.  Sometimes I get asked how to remove a member of an LLC, or even if you're going through an amicable transition with owners leaving or coming into the LLC, these documents are going to direct you how to handle that process.  If for whatever reason you are not given access to the documents you need, you need to consult with an attorney to get involved and make demand for access on your behalf.

The next step in handling a dispute with your co-owner or business partner is to create an outline and identify your goals for resolution.  Do you need to dissolve the LLC?  Do you need to remove the business partner causing the issue?  Your outline should explain the details, organize important dates and events, and summarize what happened to cause the dispute.  All of this information will assist your attorney in identifying potential solutions for the disputes.  If your dispute is based on a verbal agreement, depending on the nature of the alleged agreement, you need to work with a business attorney to see if the dispute would be resolved through the statute of frauds, or if this would be a verbal agreement that would be difficult to prove in court.

Before you resort to filing a lawsuit against your co-owner or business partner, you need to consult an attorney.  Your Operating Agreement may require mediation, arbitration, or both, before filing a lawsuit.  However, if the co-owner or business partner does not respond to the demand sent by your lawyer, you may need to file a lawsuit first, and then the co-owner or business partner can move to have the case sent to mediation and/or arbitration.  If the parties cannot reach an appropriate settlement, litigation may be the best option.  If there are serious concerns about your co-owner's or business partner's potentially illegal or unethical behavior jeopardizing the business itself, you may need to consider hiring a receiver (or asking the court to appoint a receiver), to operate the business until the lawsuit is resolved.

If you do decide to file a lawsuit against your co-owner or business partner, you need to understand it will be an extremely involved and time-consuming process.  After the initial pleadings are filed with the court, there is discovery and review of the evidence, and also depositions are all involved.  All of this can eliminate a sense of privacy, take up a lot of your time, and be emotionally draining.  You will also probably need to testify in court if the matter goes to trial, or even if you're seeking a preliminary injunction.  This is why you need to consult with an experienced business attorney to help you defend your legal rights, navigate the process with you, and help you reach your desired goals.

Thinking about starting a small business?  Or maybe your small business is having issues with contracts, leases, business partners, collection issues, or experiencing other barriers to growth?  Please contact me at [email protected] to schedule a FREE strategy session.

For more information about Liberty Legal Solutions, LLC, please visit our website at http://www.libertylegalok.com/