What are my rights if my partner closed our business without my written consent?

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What are my rights if my partner closed our business without my written consent?

My business partner and I are 50/50 owners of the LLC that we formed 4 years ago. I came down on military orders 3 years ago. Then, 2 years ago, my partner closed the business without my written

consent. He then restarted the business under the same name and as the sole owner under a different state tax EIN number. Is this legal?

Asked on January 17, 2017 under Business Law, Texas

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 4 years ago | Contributor

No, it's not legal:
1) As 50-50 owners, neither of you had the legal power or authority to close the business without the other's consent.
2) Partners have a "fiduciary duty," or duty of trust and loyalty to each other, which is violated by effectively taking a business (as he did, by closing the partnership and reopening under solely his own name) for one partner's own personal benefit.
Based on what you write, you may well have grounds to sue him for any losses (including lost profit or revenue) you have suffered from his actions. It would be worth your time to consult with an attorney who handles business disputes and lawsuits, to explore your options.


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