Before you sue your business partner
The operating agreement, the books and the buyout clause: three things to read before a dispute between owners goes to court.
A lawsuit between business owners is rarely about one bad act. It's about years of trust running out. Before it reaches a court, three documents usually decide how it will go.
The operating or partnership agreement
It sets who votes, how a manager is removed, what happens on deadlock and whether disputes go to arbitration. If there's no written agreement, the state's default rules fill the gap, and they may not be the rules you'd have chosen.
The books
Owners usually have a right to inspect company records, but often only for a proper purpose and after a written demand. A careful demand, sent early, often tells you whether you have a case at all.
The buyout clause
Many agreements say how an owner can be bought out and how the price is set. If yours does, it may be the fastest way out, and the other side may already be thinking about it.
Most owner disputes end with one owner buying the other out. The lawsuit is often how the price gets set.
Before you send anything
Don't take company money, files or customers on your way out, even if you think they're yours. It can turn a strong claim into a weak one.
This guide is general information, not legal advice. The rules for companies differ from state to state.