What are my rights if my partner closed our business without my written consent?
Get Legal Help Today
Compare Quotes From Top Companies and Save
Secured with SHA-256 Encryption
What are my rights if my partner closed our business without my written consent?
My business partner and I are 50/50 owners of the LLC that we formed 4 years ago. I came down on military orders 3 years ago. Then, 2 years ago, my partner closed the business without my written
consent. He then restarted the business under the same name and as the sole owner under a different state tax EIN number. Is this legal?
Asked on January 17, 2017 under Business Law, Texas
Answers:
SJZ, Member, New York Bar / FreeAdvice Contributing Attorney
Answered 7 years ago | Contributor
No, it's not legal:
1) As 50-50 owners, neither of you had the legal power or authority to close the business without the other's consent.
2) Partners have a "fiduciary duty," or duty of trust and loyalty to each other, which is violated by effectively taking a business (as he did, by closing the partnership and reopening under solely his own name) for one partner's own personal benefit.
Based on what you write, you may well have grounds to sue him for any losses (including lost profit or revenue) you have suffered from his actions. It would be worth your time to consult with an attorney who handles business disputes and lawsuits, to explore your options.
IMPORTANT NOTICE: The Answer(s) provided above are for general information only. The attorney providing the answer was not serving as the attorney for the person submitting the question or in any attorney-client relationship with such person. Laws may vary from state to state, and sometimes change. Tiny variations in the facts, or a fact not set forth in a question, often can change a legal outcome or an attorney's conclusion. Although AttorneyPages.com has verified the attorney was admitted to practice law in at least one jurisdiction, he or she may not be authorized to practice law in the jurisdiction referred to in the question, nor is he or she necessarily experienced in the area of the law involved. Unlike the information in the Answer(s) above, upon which you should NOT rely, for personal advice you can rely upon we suggest you retain an attorney to represent you.