How can you handle a business partnership and shareholder dispute?

If you experience a shareholder dispute between yourself and a business partner, don't take it lightly. A seemingly minor conflict between shareholders can easily expand into a wide chasm that drives partners further apart than either ever expected. Lean on the skills of an experienced attorney who can help those with closely held equity interests in a business resolve their dispute.

Ideally, preventative steps are taken during the formation of a business to provide anticipatory dispute resolution procedures and exit strategies. These are meant to prevent future conflicts like shareholder disputes between business partners. If these stipulations are not in your company's original agreements, it is possible to amend the language with the cooperation of your business partner and the assistance of your corporate attorney. However, disputes can still arise and when they become unmanageable, you'll need the assistance of your attorney.

A corporate attorney will work with you to facilitate your transition through each stage of a partnership dispute. It is possible to disengage partners from the company through dispute resolutions like deadlocked resolutions, dissolution, partnership litigation and fair value buy out remedies. Yet there is also the potential for the company, its shareholders, partners and other owners to be fully preserved with the assistance of a corporate attorney.

If deemed appropriate, your conflict can take the non-litigation dispute resolution route. This practice can apply governance structures, appraisal rights and buy-out procedures. It can be appropriate to generate agreements that address key issues like intellectual property protection, taxation qualms and disagreements over executive compensation. Some law firms even have practices devoted specifically to "business partners and shareholders disputes" for a full fledged resource that prevents disputes between partners from spiraling out of control.

Every business owner should be aware that litigating shareholder disputes involves several complex laws that set the groundwork for the governance of partnership disputes. A savvy legal will dig deeply into the intricacies of each individual shareholder dispute from every possible angle.

Experienced corporate attorneys will look into the liability of your partner, officers and directors. He'll also research for potential breaches of contract and fiduciary duty. Above all, your corporate attorney will develop and implement tactical legal strategies, including litigation, to benefit your interest and remedy the dispute. From litigation to mediation, arbitration and valuation procedures, your attorney will serve a critical role in resolving your shareholder dispute.

How business owners' rights are controlled by restrictions in a commercial lease?

For the most part, commercial leases are different from residential leases. For starters, commercial leases are frequently drawn up for a longer period than residential leases. The length of the lease might be a three, 10 or even 99 year term agreement depending on the tenant situation and the landlord.


Business tenants frequently encounter more operating costs and expenses than residential tenants. Additionally, there are usually more restrictions covering the manner in which the premises can be used including whether any portion of the space may be sublet. If a sublet is something that might be of interest at some point in the future, business owners usually have to approach the landlord for this type of amendment prior to signing the initial lease.


As a general rule, whether it's a sublet clause or other changes, it's not a wise idea to attempt to handle lease negotiations yourself. Hiring an experienced real estate attorney is money well spent. An attorney provide valuable insights and protection for business renters.


We strongly recommend that you consult with counsel prior to signing any legal documents. To give you an overview and factors that should be spelled out in the lease agreement consider the following:

• Whether or not the tenant can erect a business sign.
• The size and type of signage allowed.
• Is there an automatic lease renewal at the end of the lease.
• When the landlord is able to enter the premises with or without tenant permission.
• Who is responsible for paying real estate taxes and flood insurance?
• The level of traffic allowed in the premises.
• Is heating included in the rent, or is there a separate charge?
• Specified uses of the premises.
• Is the building available to tenants 24/7?
• Provision for an early termination agreement.
• Will there be common area maintenance charges such as building elevators, parking areas, landscaping and common hallways?
• If build-outs are needed by the tenant, who's responsible for the expenses?
• How are the utilities paid?
• What is the rental deposit amount?
• What are the deduction for unrepaired damages, and the associated refund terms?
• Is your specific business covered under the zoning laws for the building you're considering? You will need this in writing.
• Is there building security? If so, what are the hours and are visitors required to show state or federal ID?

Please feel free to contact us for a consultation.

How to get out safely from a bad business partnership?

If you've suffered through a bad business partnership that hasn't worked out as you envisioned, it is possible to escape without suffering a significant financial loss. A business partnership breakup is somewhat analogous to a marriage that doesn't work out. The business represents the child and both parties want custody.

The first thing to do is check your agreement. It will likely contain detailed information about how and when one of the partners can exit the partnership. If the business is an LLC, consult the operating agreement. If it is operated as a corporation, you'll have to refer to the shareholder agreement. If you own part of a small business and don't have anything in writing, refer to your state's default rules that apply to your unique entity. Each state has company laws and corporation laws that apply to silent agreements.

There will be a challenge if you are a member of an LLC or a shareholder of a corporation. It might not be possible to persuade your estranged business partner to buy you out and let you exit the partnership. Hopefully, the agreement that you have in place will have either a buy out/withdrawal remedy. It is also possible to force a business buy out. In certain situations, a partner can take his business family to court and request that a judge dissolve it. If the judge cooperates, he'll distribute the business's assets to the partners as he sees fit. However, this is an extreme step that hinges on the idiosyncratic facts of your business's dysfunctional situation.

It is also possible to petition the court for a forced dissolution if you own half the shares of an incorporated entity. You'll have to prove that the company's management is guilty of fraudulent, oppressive or illegal actions against you. Or, you can attempt to prove that management is deadlocked with no hope of achieving a resolution. It is worth noting that partners who own at least one fifth of a business are also permitted to petition in order to exit the business. However, the partner will have to prove that the other partner has acted in an illegal, oppressive or fraudulent manner. The judge will then decide if the liquidation of the corporation or a buy out is the proper remedy. He can also decide that the status quo is acceptable and the ownership situation should not change.

A partner can also sue the other owner(s) to exit the partnership. However, this might spur those partners to force a buy out of the other partner's stake in the company. Business corporation law permits estranged business owners to buy the other partner out for the fair value of his ownership percentage. The partners must choose to pursue a buy out within 90 days after the lawsuit has been filed with the court. If you can come to an agreement on the fair value of your ownership percentage, this is a realistic solution. Unfortunately, it is often difficult for disenfranchised partners to agree on such a value.  http://goo.gl/H8HQ2L