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Business disputes are common when it comes to the operation and ownership of businesses in Texas whether they are run and managed as Limited Liability Companies (LLC’s), Corporations (S-Corps or C-Corps), Limited Partnerships, or even Sole Proprietorships.

As a lawyer for over 36 years, I have represented clients in almost every industry and have witnessed the dysfunction and strong emotions which result from business disputes which rise to the breaking point threatening the very existence of the underlying ventures.  So, when should you seek the advice of a Texas business dispute attorney?  Here are a few guideposts to consider:

Is the Business Dispute Threatening the Operation of the Business?

Disputes are a part of human nature and unavoidable. Whether at home or in business, people have different perspectives and see things differently. There is nothing fundamentally wrong with that and often the consideration of different points of view can actually improve decision making.  However, when the dispute turns into a protracted conflict which causes business paralysis or leads one of the partners to question the honesty of another – that is a different situation.

A typical business dispute which requires legal attention is when there is a stalemate between partners with a 50/50 ownership.  Given that the partners share equal ownership and control, the inability to make critical decisions can destroy the very operation and profitability of the business.  In these situations, there is no way out if the partners are unwilling to work out the business dispute.

Attorneys skilled in the area of business disputes like the Moster Craft law firm can offer a variety of legal options and remedies to break the business deadlock available under Texas law.  Additionally, other factors present in the case, for example, the possibility that one of the partners may have engaged in actions in violation of Texas Business Law, may offer one of our clients extra leverage in resolving the dispute.  The key is to get legal advice before the situation becomes uncontrollable.

Breach of Fiduciary Duty and Self-Dealing

This comes up frequently in Texas business disputes.  Breach of Fiduciary Duty means that partners have a special relationship with each other to act with integrity and always in the interest of the business, not themselves.  Self-dealing is similar in that a partner cannot take advantage of his/her role in the company to usurp what’s know as a corporate opportunity for personal gain (also called the Usurpation of a Corporate Opportunity).

Breach of fiduciary duty and self-dealing come in all varieties including unfair distribution of dividends or salary, denial of one partner access to company records, failure to notify partner of important decisions, one partner making decisions without the consent of the other, failure to follow corporate formalities, among others.

Acts of Theft and Fraud

These types of actions are the most severe cases and may require immediate legal action.  Examples are varied but include outright theft or conversion of corporate funds, removal of monies from corporate bank accounts without authorization, use of corporate funds for personal use, locking another partner out of the business facility, opening a competitive business without authority, and so on.

If you are the victim of business theft or fraud, the situation can be heartbreaking along with strong emotions of betrayal and anger.  It is common for clients to take matters into their own hands which will almost always destroy their chances of winning in court should that be recommended by an attorney.

Bottom Line:

If you are involved in a business dispute, it makes sense to consult an experienced Texas business dispute lawyer like Moster Craft.  Mr. Moster has over three decades of experience and is here to provide immediate counsel and recommendation.

Give us a call for a free consultation which includes a complimentary review of your documents.

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