Business Ownership Disputes

Business-Ownership-DisputesBusiness ownership considerations can be a source of complication and conflict, particularly when it comes to allocating control, financial returns as well as potential liabilities. In a private company these issues can be clarified using articles of association or a shareholder agreement, as well as by issuing different classes of shares. In a partnership, a written partnership agreement serves a similar purpose.

In business operation, disagreements between owners, partners or shareholders certainly arise. Many disputes can be avoided by choosing the appropriate organization for your business. However, there are other issues that cannot be foreseen and will just arise while at the course of running the business. Financial crisis is the most common reason for an ownership dispute. Sometimes this reason may lead to the bankruptcy of the business itself.

Business ownership disputes arises when one or more business owners;

  • dies
  • wants to sell to a non-owner
  • goes bankrupt
  • who is also an employee, quits
  • who is also an employee, is fired
  • becomes disabled
  • wants to buy you out
  • wants you to buy him or her out
  • gets divorced
  • sells to a disqualified owner in a subchapter S corporation
  • sells to a non minority in a minority owned business that relies on government
  • minority set asides

Typically, business ownership disputes need to be resolved as quickly as possible to avoid disruption of the daily operations of the business. The litigation process can be expensive and the best way to settle the issue is mediation. This is because an owner of business and partnership wants an amicable settlement in order to continue their services to their customers.

On the other hand, if they weren’t able to resolve the dispute, owners may decide to continue or totally dissolved the business. However, remember that in partnership, if one of the partners objects to the continuance of the business the other partners must adhere to this.

Lastly, if your company is going through this kind of disputes, it is best to seek legal advice so you can be assisted with the right process appropriate for your company’s issue.

more about Business legal disputes