Like any other relationship, business owners, partners and stockholders can go their separate ways. The split can be a mature, reasoned division of assets — or it can result in conflict.
Different statutes govern different types of businesses — corporation, limited liability companies and partnerships. Because of this, shareholders’ agreements, operating agreements, notes and other legal documents can change your rights. However, even with no documents, it’s still possible to prove and protect your rights.
It is critical to know your legal rights before trying to negotiate with your soon-to-be former partners. Let our attorneys review any agreements that you have and consult with you on how Florida statutes impact your rights.
Barakat + Bossa partners helped re-write the Corporations Act.
As a result we offer expertise on many issues and know the intent of the law.
When a party is taking action that damages a business, the owners of the business have the right to demand that the business itself investigate and pursue its rights. All too often, the person damaging the business also has a controlling interest in the business.
Florida law provides a mechanism for minority owners to demand that the company take action to protect itself — a derivative action. Owners who want to stop the damaging behavior first demand that the company take action. If the company fails to do so, the owners (often minority owners) can file a lawsuit on behalf of the company itself. The company can then prosecute the offending shareholder and recover any stolen money, remove them from the board of directors or take other action deemed appropriate by the court.
Minority business owners have rights. Often, the law dictates that minority owners are owed special fiduciary duties to protect them from owners or blocks of owners that wish to take advantage of their weak status. If you own a small percentage of a business and the majority owners have locked you out or have taken advantage to prevent you from sharing in the profits, you have the right to challenge those actions.
Majority owners who take action which benefits themselves have the burden to show that their actions were in the best interest of the whole company, not just themselves.
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