Your Business Partner Makes Decisions Without You
In any business partnership, communication and trust are key. But what happens when your business partner starts making significant decisions without consulting you? Whether it’s locking you out of financial decisions, changing passwords, or excluding you from major strategic moves, being shut out of critical decision-making can damage both your role in the business and the success of the company.
When partners start making decisions unilaterally, it’s important to understand your rights and legal options. In this article, we’ll explore what you can do if your partner excludes you, the legal remedies available, and how a commercial litigation lawyer can help you protect your interests.
Can Your Business Partner Legally Make Decisions Without You?
In most cases, no partner can make significant decisions without consulting the other, unless the partnership agreement provides legal grounds for doing so. A well-drafted partnership agreement should outline the roles and responsibilities of each partner, including how decisions should be made.
Without such an agreement, business relationships in Ontario are generally governed by the Partnership Act, 1990, which ensures that partners have equal rights and responsibilities unless otherwise stated. This means that one partner cannot simply force another out of the business or exclude them from decision-making unless the agreement explicitly allows it.
However, some partners may resort to unfair or even illegal methods to gain control of the business. These tactics could include:
- Preventing access to the partnership’s financial records or bank accounts;
- Removing access to the company’s website or digital systems;
- Changing passwords to lock the other partner out; or
- Refusing to communicate or involve the partner in business decisions.
If you find yourself in this situation, it’s essential to take action quickly to protect your interests.
What to Do When Your Business Partner Excludes You
If your partner is shutting you out of the business, here are immediate steps you should take:
- Review Your Partnership Agreement
Check if the agreement contains provisions about how disputes should be handled. Many agreements include dispute resolution clauses that require partners to resolve conflicts through mediation or arbitration before going to court. If such a clause exists, you may need to follow the specified process. - Document the Exclusion
Begin gathering evidence of the exclusion, such as communications where you’ve been ignored or actions like changes to financial accounts or system access. This documentation will be crucial if you need to pursue legal action. - Consult a Commercial Litigation Lawyer
Before taking further steps, it’s important to consult with a lawyer. They can help you understand your legal rights, advise you on your options, and assist with any necessary legal actions.
Your Legal Options to Protect Your Interests
If your partner’s actions violate your partnership agreement or legal rights, there are several legal options available to you. Here are some common claims and remedies in partnership disputes:
- Breach of Partnership Agreement
If your partner’s actions are contrary to the partnership agreement, you may have grounds to file a breach of contract claim. This can involve suing for damages or seeking a court order to enforce the terms of the agreement. - Breach of Fiduciary Duty
Partners owe each other a fiduciary duty, meaning they must act in good faith and in the best interests of the business. Locking you out of the business could be considered a breach of this duty. Examples include:- Blocking access to financial records or bank accounts.
- Misrepresenting the financial status of the business.
- Excluding you from key decision-making processes.
In these cases, you could sue for breach of fiduciary duty and seek damages for the harm caused by your partner’s actions.
- Legal Remedies
If successful in court, you may be entitled to various remedies, including:- Granting access to the business or financial records.
- Forcing a buy-out of your share in the partnership.
- Dissolution of the partnership if the situation is irreparable.
How a Commercial Litigation Lawyer Can Help
Navigating a partnership dispute can be complex, especially when your rights are being ignored. A commercial litigation lawyer can help by:
- Reviewing your partnership agreement and assessing your legal standing.
- Advising you on the best course of action, whether through negotiation, mediation, or litigation.
- Representing you in court or during mediation to assert your rights.
- Handling the legal process, including pleadings, discovery, and pre-trial motions, to maximize your chances of success.
Even if you need to go through mediation or arbitration, a lawyer will ensure that your interests are protected and that you achieve the best possible outcome.
Conclusion
If your business partner is pushing you out of the decision-making process, it’s essential to act quickly. Whether your partnership agreement has a dispute resolution process or you need to pursue a legal claim in court, there are steps you can take to protect your rights and ensure that you are not unfairly excluded from the business.
Gather your documents, consult with a commercial litigation lawyer, and explore the legal remedies available to you. With the right legal support, you can address the issue and safeguard your interests in the business.
Contact Achkar Law
If your partner is excluding you from business decisions and you need legal advice, our experienced partnership dispute lawyers at Achkar Law can help. Contact us today to learn more about your rights and the steps you can take to protect your role in the business.
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