Los Angeles Business Dispute Attorney
Any type of business dispute can impact your business' success. At the Law Office of Steven R. Lovett, our Los Angeles business dispute lawyer has over 40 years of experience providing aggressive and knowledgeable representation to clients involved in a wide range of business disputes. We will discuss all of the options available for resolving your dispute with you so that you can make an informed decision about how your case moves forward.
We represent any business entity, from partnerships to corporations, in business disputes. Contact us today to learn what we can do for you.
Resolving Partnership Disputes in Southern California
A partnership is defined as an association of two or more persons to carry on as co-owners of a business for profit (California Corporations Code Section 15006). Each partner owes to the partnership and the other partners are the duty of loyalty. Each party is a trustee for his co-partners, and they maintain the highest fiduciary duty to one another. Partners must fully account to the partnership and must not appropriate a partnership opportunity or take secret profits (California Corporations Code Section 16404). Corporations Code Section 16401(a)(2)(b) provides that partners are entitled to an equal division of profits and losses. Of course, the parties can change this division by the terms of a written agreement.
Generally, when there was a dispute between partners, the partners were forced to sue to dissolve the partnership, for an accounting and to wind up partnership affairs. The 1994 Uniform Partnership Act changed the prohibition on actions at law so that a party may now sue another partner for legal or equitable relief, without an accounting (California Corporations Code Section 16405).
A partner of a dissolved partnership who attempts to reap a personal gain from the unfinished business of the dissolved partnership is liable to his or her partners for breach of fiduciary duty. Rosenfeld, Meyer & Susman v. Cohen (1983) 146 Cal. App.3d 200.
The Law Office of Steven R. Lovett has represented parties in many partnership disputes. Mr. Lovett wrote California Partnership Handbook 2d (Charing Cross Publishing).
Corporation Disputes in California
If at least 50% of shareholders elect to wind up and dissolve a corporation, the corporation can file a certificate electing to dissolve with the California Secretary of State. During the winding up process, the corporation must then pay its taxes and arrange for tax clearance with the California Franchise Tax Board prior to the final dissolution of the corporation. A shareholder may request that the court supervise such a voluntary dissolution.
Similar to partnership disputes, when there is a dispute between shareholders of a corporation, the shareholders may sue to dissolve the corporation. At least one half of the directors in office or shareholders holding at least 33 1/3% of outstanding shares can sue to involuntarily dissolve a corporation (California Corporations Code Section 1800). A judge may appoint a receiver to manage the corporate affairs pending dissolution and winding up of the corporation. When faced with an involuntary dissolution, the corporation or, if it does not elect to purchase, the holders of 50 percent or more of the voting power of the corporation may avoid the dissolution of the corporation and the appointment of any receiver by purchasing for cash the shares owned by the plaintiffs or by the shareholders so initiating the proceeding at their fair value. California Corporations Code §2000(a). If there is a deadlock between directors of a corporation, a court may appoint a provisional director in order to break the deadlock.
Limited Liability Company (LLC) Disputes Attorney
The fiduciary duties owed by a manager of a limited liability company (LLC) are the same as those owed by a partner to a partnership and to the other partners (California Corporations Code Section 17153). Many of the same types of disputes set forth above concerning corporations and partnerships also face managers and members of an LLC.
Learn more about how we can help you with your business litigation needs. Contact us by e-mail or call us for a free telephonic consultation.