Internal Business Disputes
An internal business dispute is usually a dispute between two or more persons with an ownership interest in the same company. The procedures to handle each dispute will depend on the type of entity at issue and the roles each party plays in that entity. Internal business disputes occur both in closely-held businesses and publicly traded companies, but the rights, obligations, and available remedies can differ greatly.
Common Internal Business Dispute Issues
The most common issues raised between business owners involve freeze-outs, buy-outs, income discrepancies, and business owners syphoning business property or opportunities for personal gain. While some issues arise when businesses are failing, the majority of issues come to a head when a business is doing well but there is a belief that one or more of the parties is either not contributing properly to the business or is taking more than their share of the profits.
Internal business disputes usually involve a mix of contract and fiduciary duty claims.
Handling Internal Business Disputes
Often, both sides in a failing business relationship desire to get out of the relationship altogether, and once each side is properly advised by counsel, a resolution may be negotiated.
Internal contracts, such as by-laws or an operating agreement, may set forth procedures to resolve such disputes without the necessity of going to court.
Often, both sides in a failing business relationship desire to get out of the business altogether, and once each side is properly advised by counsel, a resolution may be negotiated. If necessary, a court can make determinations on any issues left unresolved by the parties.