Resolving Disputes Between Business Owners in Tyler

Co-owners start out with the same goals, but over time disagreements come up over money, workload, strategy or someone’s exit. When owners stop agreeing, the business can stall. Lindsey Birdsong has represented businesses in arbitration with departing shareholders and mediated disputes between physician groups and departing physicians.

Start With Your Governing Documents

Your company agreement, shareholder agreement or partnership agreement usually controls. Look for voting rules, deadlock provisions, buy-sell terms, valuation methods and dispute resolution clauses. If you do not have these documents, Texas default rules apply. Our article on what an LLC company agreement should include explains why they matter.

Common Sources of Conflict

• Disagreement over distributions or salaries
• One owner doing more of the work
• Accusations of mismanagement or self-dealing
• An owner who wants out, or wants another owner out
• Divorce, death or disability of an owner

Options for Resolution

A negotiated buyout is often the best result for everyone. Mediation can help owners reach terms without the cost of a lawsuit. Some agreements require arbitration. When fiduciary duties have been breached or money is missing, litigation may be necessary to protect your interest.

Protect the Business While You Work It Out

Keep records, avoid taking unilateral action with company funds, and continue to meet obligations to employees, customers and lenders.

The best time to plan for owner exits is before a dispute. See business succession planning for Tyler owners.

Frequently Asked Questions

Can I force my business partner out of our LLC?

It depends on your company agreement. Without a provision allowing expulsion or a buyout, removing an owner usually requires agreement or court action.

What if we don’t have a written agreement?

Texas default rules will govern. Those rules may not fit your situation, so get advice before taking action.

Talk With a Tyler Attorney

In a dispute with a co-owner? See our business litigation services. Call Lindsey Birdsong, PC at (903) 595‑6297 or visit our contact page. Our office is at 2307 Dueling Oaks Drive, Suite 103, in Tyler.

This article is general information, not legal advice. Talk with an attorney about your specific situation.