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What are my options if I have a conflict with a business partner?

On Behalf of | May 2, 2023 | Business Litigation

If you are involved in a partnership or shareholder dispute in New Jersey, you wonder about your legal options. Partnership and shareholder disputes can be complex and costly, affecting not only your business interests but also your personal and professional relationships. However, you have legal remedies available to you.

Common causes of disputes

Partnership and shareholder disputes can arise for a variety of reasons, like a breach of fiduciary duty. This occurs when a partner or shareholder acts in a way that harms the interests of the business or other partners or shareholders, such as by misappropriating funds, disclosing confidential information or competing with the business.

There could also be allegations of breach of contract. This occurs when a partner or shareholder violates the terms of a partnership agreement, shareholder agreement or other contract that governs the rights and obligations of the parties.

Fraud is another common allegation. This occurs when a partner or shareholder intentionally deceives or misrepresents a material fact to induce another party to act or refrain from acting, resulting in harm to the other party.

Another issue is minority oppression. This occurs when a majority partner or shareholder abuses their power to oppress, exclude or disadvantage a minority partner or shareholder, such as by denying them access to information, dividends or voting rights. Similarly, is dissolution. This occurs when a partner or shareholder seeks to end the business relationship and liquidate the assets of the business.

Legal remedies

Depending on the nature and severity of the dispute, you have several New Jersey legal options. The first is to try to work it out between the partners through a negotiation. This involves trying to resolve the dispute through direct communication and compromise with the other party, without involving a third party or going to court. Negotiation can be faster and cheaper than litigation, but it requires both parties to cooperate.

Next, you can try mediation. This involves hiring a neutral third party (a mediator) to facilitate dialogue between the parties and help them reach a settlement. Mediation can be more flexible and creative than litigation, but it does not guarantee a resolution.

Finally, there is arbitration or litigation. Arbitration involves submitting the dispute for a binding decision by an impartial third party (an arbitrator) as a judge. It can be more efficient and confidential than litigation, but it limits the parties’ appeal rights and discovery. Similarly, litigation involves filing a lawsuit in court and going through a formal trial process. Litigation can provide more protection and enforcement than alternative dispute resolution methods, but it can also be more expensive, time-consuming and unpredictable.


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