Business Partner Disputes in Houston
When you and your business partner can’t agree anymore, the conflict doesn’t just go away on its own. Partner disputes destroy companies, drain bank accounts, and turn people who once trusted each other into enemies. If you’re facing a serious disagreement with your co-owner, you need to understand your legal options before the situation gets worse.
When you meet with an experienced Houston business partner dispute lawyer at Roger G. Jain & Associates, PC, we’ll explore what legal remedies you have. Whether you’re dealing with financial disagreements, breach of fiduciary duty, or a complete breakdown in your partnership, knowing your rights is the first step toward protecting your investment. Learn more about our firm by calling us at 713-981-0600.
Our office is located at 9301 Southwest Freeway, Suite 250, Houston, TX 77074. We’re on Highway 59 between Gessner Road and Hillcroft Avenue, just north of Bissonnet Street, with ample parking and easy access from all major southwest Houston corridors.
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Common Types of Houston Business Partner Disputes
Partnership conflicts come in many forms, but certain issues appear repeatedly in courtrooms across the country.
- Financial Disagreements: One partner might be taking excessive salary, hiding profits, or using company funds for personal expenses. When someone violates their financial obligations to the business, it’s not just unethical—it’s often illegal.
- Management Control Issues: When partners disagree about the direction of the company, it can tear partnerships apart. You might want to expand, while your partner wants to stay small. One person might be making major decisions without consulting the other. These power struggles escalate quickly without clear operating agreements.
- Breach of Fiduciary Duty: This happens when a partner puts their personal interests ahead of the business. This includes competing with your own company, stealing clients, sharing confidential information, or self-dealing. Partners owe each other loyalty, and violating that duty has serious legal consequences.
- Deadlock Situations: When partners simply can’t agree on critical business decisions, the company grinds to a halt. Without a tie-breaking mechanism in your operating agreement, deadlock can paralyze your business and force legal intervention.
- Buyout Disagreements: These emerge when one partner wants out but can’t agree on the company’s value or buyout terms. What seems like a straightforward exit can turn into a bitter legal battle over valuation methods and payment schedules.
What Texas Law Says About Your Rights
Your operating agreement or partnership agreement controls most of what happens in a dispute. If you drafted a solid agreement that covers buyouts, decision-making, and how to handle disagreements, you’re ahead of partners who just shook hands and started a business.
Without a written agreement, Texas law still protects you. The Texas Business Organizations Code sets the rules for partnerships, LLCs, and corporations. For partnerships, the Texas Revised Partnership Act fills in the gaps when your agreement doesn’t address something. For LLCs, Chapter 101 of the code spells out what rights members have.
Under Texas law, partners in a general partnership have equal rights to manage the business unless their agreement says otherwise. Each partner can bind the partnership to contracts and agreements in the ordinary course of business. For LLCs, management structure depends on whether you’re member-managed or manager-managed, as stated in your formation documents.
Fiduciary duties are non-negotiable under Texas law. The BOC requires partners and LLC members to act in good faith and deal fairly with the company and each other. Partners must avoid conflicts of interest and can’t compete with their own business or usurp corporate opportunities. While Texas allows some modification of fiduciary duties in LLC operating agreements, you can’t eliminate them entirely. If your partner breaches their fiduciary duty, you have grounds for legal action.
Texas courts can order several remedies in partnership disputes:
- Judicial dissolution: Under BOC Section 11.051, a court can dissolve a partnership or LLC when it’s no longer reasonably practicable to carry on business, when management is deadlocked, or when a partner or member has engaged in illegal or oppressive conduct
- Buyout orders: Texas courts can order one owner to buy out another’s interest at fair market value, often determined through business valuation experts
- Appointment of a receiver: A neutral third party can take over management temporarily to protect business assets
- Injunctive relief: Courts can order partners to stop harmful behaviors like misappropriating funds or violating non-compete provisions
- Monetary damages: The wronged partner can recover financial losses caused by breach of fiduciary duty, fraud, or contract violations
Texas also recognizes claims for oppression of minority owners. If you own less than 50% of the company and the majority owners are freezing you out, denying you access to information, or engaging in unfair conduct, Texas law provides remedies even without a written agreement spelling out your rights.
Do You Need Legal Help Now?
Don’t wait until your business is destroyed to call a Houston attorney. Certain red flags demand immediate legal intervention.
Contact a lawyer right away if your partner is transferring company assets, draining bank accounts, or moving money in ways that seem suspicious. These actions can cause irreversible harm to the business and your financial interest in it.
If your partner has locked you out of the office, changed passwords, or blocked your access to financial records, you’re facing a serious escalation. You have legal rights to access company information, and an attorney can enforce those rights quickly.
Threats of litigation should never be ignored.
If your partner or their lawyer has sent a demand letter or threatened to sue, respond with your own legal counsel. What you say and do next matters enormously.
When you discover your partner is competing with the business, soliciting your clients, or planning to leave and take key employees with them, act fast. The longer these breaches continue, the more damage they cause.
Our Houston Business Dispute Law Firm Can Help
An experienced business litigation attorney at Roger G. Jain & Associates, PC, can help you resolve business disputes without going to court. We will review your partnership agreement, corporate documents, and financial records to assess your legal position. We’ll identify where your partner has violated the agreement or breached their duties and develop a strategy to protect your interests.
Your business represents years of hard work and financial investment. Don’t let a partnership dispute destroy what you’ve built. Contact an experienced business litigation attorney today to discuss your case and develop a strategy for moving forward.
Call 713-981-0600 or fill out our confidential contact form to schedule a risk-free, no-obligation consultation.