Los Angeles Partnership & Ownership Dispute Law Firm

Owners and members of California corporations, partnerships, and limited liability companies enjoy numerous advantages from a business structure point of view. They are relatively easy to start up, are quite flexible, and allow stakeholders to share in costs, risks, and profits. Unfortunately, some of these benefits may be overshadowed by the negatives: According to The Balance Small Business, 70 percent of these organizations ultimately fail, often because of partner and ownership disputes that can destroy the company from within.

At Litigation, P.C., our lawyer understands the concerns of business partners and owners when disputes arise. We are dedicated to exploring and advising you on options to resolve disagreements, depending on the goals you aim to achieve. Please contact our firm to schedule a consultation with a lawyer, and read on for some background information about the relevant legal concepts.

Common Causes of Partnership Disputes in California Among Owners

Stakeholder disputes often stem from the lack of an agreement among owners or failure to specify the terms of owners’ relationships. As such, partners may encounter conflicts related to rights, responsibilities, control, management structure, daily operations, and many other topics. The most common factors behind partnership and owners’ disputes include:

• Issues over whether a partnership was actually formed by law, as opposed to filing official documentation;
• Fraudulent activity and misrepresentation by one partner or owner;
• Disagreements about whether each partner are equally contributing time and energy into the business or partnership;
• Disagreements arising from the lack of a written agreement among the shareholders, partners or members of a business entity;
• Breach of employment contract, when a stakeholder is a key employee;
• Conflicts of interest;
• Breach of fiduciary duties, such as a majority shareholder’s failure to protect the interests of the minority shareholders;
• Unequal monetary contributions by the partners for the business’ liabilities or disproportionate monetary distributions made by a single partner;
• Misappropriation of funds or assets, such as the use of business funds for personal expenses;
• One party wishes to buy out the other from the business but they cannot agree on terms; or,
• Diversion of business opportunities.

Common Scenarios of Disputes Among Owners

The team at Litigation, P.C., is experienced in assisting stakeholders in a multitude of common disputes that frequently arise in business, such as:

• Friends enter into a partnership or business idea and agree they will be “50/50” partners in everything and have no written agreement, and now one partner feels the other is not pulling his or her weight;
• Friends decide to “flip a house” together, and now one claims the other is not equally contributing to the unexpected expenses that were discovered during renovations;
• A stakeholder claims the other is refusing to provide an accounting and refuses to make any distributions claiming that the business is not profitable;
• A partner is accusing the other of “uncontrollable” spending of business funds, including using it for personal reasons;
• A customer refuses to pay for goods or services rendered;
• Two stakeholders can’t get along and agree one should be bought out, but the two cannot agree on the price or terms;
• A stakeholder discovers that the other partner purchased business assets with corporate funds under the partner’s individual name and not in the name of the partnership; or
• A business tenant discovered that the landlord misrepresented the true condition of the property before the lease was executed.

In some cases, the partnership dispute is not quite as clear-cut because it involves a disagreement over visions for the company’s growth or expansion. If not addressed in a timely, appropriate fashion, these conflicts threaten current business operations – and may even destroy the organization completely.

Our Team Can Assist with Resolving Partnership Disputes

Business stakeholders can take advantage of multiple ways to resolve disagreements, some of which do not require going to court. Litigation, P.C. can advise you on several options, such as:

• Accounting Requests: At times, disputes are the result of misunderstandings about where resources are being expended. By requesting an accounting, all partners will be on the same page.
• Negotiation: Some partnership disagreements can be resolved when attorneys step in to explain the relevant legal concepts and take emotion out of the picture.
• Mediation: Professionals who are trained in the arts of mediation can facilitate agreement and productive conversation among owners, which can lead to compromise.
• Dissolution: It may make sense to dissolve the business under certain circumstances.

If there are no appropriate non-litigation alternatives, we are ready to protect your interests in court.

Speak to A Lawyer Today

We can set up a consultation with a partnership and ownership disputes attorney to learn more about the details. Once we review your circumstances, we can develop a strategy for resolving any disagreements. For a confidential consultation with an experienced lawyer, contact Litigation, P.C., at 424-284-2401 or online to learn about your legal options. We routinely handle matters throughout SoCal.