Business separation among partners can be a challenging and complex process, one you do not want to navigate alone. In some cases, a minority partner may find themselves frozen out of their company, without a say in the business or access to important financial information. In Pennsylvania, minority owners partners have certain rights that can help them protect their interests and ensure a fair separation. In other cases, the majority owners may find company business threatened by the unreasonable or illegal actions of a minority owner. Either way, we can help you navigate the situation.
One option is to dissolve the business and the relationships. When a business partnership dissolves, there are several steps that need to be taken to separate the assets and liabilities of the company. This process can be complicated, especially if there are disputes between the owners. Minority owners may find themselves at a disadvantage, as they often have less control over the company and may not have access to all of the financial information.
Rights for members in the company are generated from a) the company’s operating agreement or articles of incorporation depending on the type of entity, b) the Statutes in place that govern the type of entity, and c) Pennsylvania case law.
One of the most important rights of a minority owner is the right to inspect the company’s books and records. Under Pennsylvania law, many of the different entities such as partnerships, limited liability companies and corporations give the members the right to inspect the books and records of the company, including financial statements, tax returns, and other important documents. Additionally, This can be a powerful tool for a minority partner who is trying to protect their interests in the company.
In addition to the right to inspect the books and records of the company, minority partners also have the right to bring legal action against the other partners if they feel that their rights have been violated. This can include actions such as breach of fiduciary duty or fraud, which can result in damages being awarded to the minority partner.
One of the most difficult situations for a minority partner is being frozen out of the company. This can happen when the majority partners make decisions without consulting the minority partner or excluding them from important meetings or discussions. In Pennsylvania, a minority partner who is frozen out of their company may have the right to bring legal action to dissolve the partnership or seek other remedies.
If you are a minority partner who feels that they are being unfairly treated, you should give us a call to help speak with a qualified business attorney who can help you understand your rights and options. In some cases, it may be possible to negotiate a fair separation with the other partners, while in other cases legal action may be necessary to protect your interests.
If you are a majority owner dealing with an uncooperative minority owner, or if you have been sued by a minority owner, we can also help you take recourse or defend yourself against the minority owner.
Ultimately, business separation among partners can be a challenging process, especially for minority partners who may feel that their rights are being violated. However, in Pennsylvania, there are legal rules that can help you protect your interests and ensure a fair separation. If you are a partner facing challenges with your other partnership members, it is important to speak with a qualified business attorney who can help you understand your rights and options.