Your Business Partner Makes Decisions Without You
You built this business together. Now your partner is signing contracts without you, making financial decisions you never agreed to, locking you out of accounts, or simply refusing to include you in anything that matters. You are still a partner on paper, but you feel like you have been pushed to the side of your own business.
This situation is more common than most people realize, and it is more serious than most people initially treat it. A partner who makes unilateral decisions is not just being difficult: they may be breaching your partnership agreement, violating their fiduciary duties, and potentially exposing themselves to significant legal liability. Understanding your rights and acting quickly is essential.
Quick answer
Unless your partnership agreement specifically grants one partner sole authority, both partners have equal decision-making rights under Ontario's Partnerships Act. A partner who makes unilateral decisions, excludes you from management, or withdraws funds without consent may be in breach of fiduciary duty and the partnership agreement. Courts can order access to records, freeze assets, award damages, and compel a buyout or dissolution.
Can your partner legally make decisions without you?
In most cases, no. The default position under Ontario's Partnerships Act is that all partners have equal rights in the management and conduct of the partnership business. Unless your partnership agreement specifically provides otherwise, no single partner has the authority to override the other or exclude them from decisions.
This principle applies regardless of how much capital each partner contributed, how long each partner has been involved, or who does more of the day-to-day work. Unequal contribution does not translate into unequal authority unless the partnership agreement says so explicitly.
There are limited situations where a partner can act without the other's prior approval:
- Routine transactions that fall within the ordinary course of the partnership's business
- Decisions that your partnership agreement specifically delegates to one partner
- Urgent actions taken in good faith to protect the partnership from immediate harm
Outside of these situations, a partner who makes significant decisions unilaterally (signing major contracts, hiring or firing staff, taking on debt, changing banking arrangements, or entering new business lines) is acting outside their authority. Those decisions may be legally challengeable, and the partner may be personally liable for any resulting losses.
Example
Two equal partners run a construction business. Without consulting his partner, one partner signs a $400,000 subcontract and hires three new employees. The other partner never agreed to either decision. The partner who acted unilaterally has exceeded his authority under the partnership agreement and may be personally liable if the subcontract creates losses the partnership cannot absorb.
What the Partnerships Act says about decision-making in Ontario
Ontario's Partnerships Act sets the default rules that govern every partnership in the province that does not have a written agreement addressing a particular issue. Even where a partnership agreement exists, the Act fills any gaps the agreement leaves.
On decision-making, the Partnerships Act is clear: every partner may take part in the management of the partnership business, and differences arising as to ordinary matters connected with the partnership business may be decided by a majority of the partners. However, no change may be made in the nature of the partnership business without the consent of all existing partners.
This means that for major or fundamental decisions, unanimity is required. A partner who proceeds without unanimous consent on a fundamental matter, or without a majority on an ordinary matter, is acting outside the authority the law grants them. The legal consequences can include personal liability for any resulting losses, a claim for breach of fiduciary duty, and a court order reversing or restraining the unauthorized action.
No written agreement?
If your partnership has no written agreement, the Partnerships Act governs entirely. This protects you in some ways (equal authority is the default) but leaves many important questions unanswered: how disputes are resolved, what happens if a partner wants to exit, and how the partnership is valued on dissolution. If your partnership has been operating without a written agreement, getting one drafted is urgent.
Can your business partner withdraw funds without your consent?
This is one of the most urgent and damaging forms of unilateral partner conduct, and one of the most frequently searched questions in partnership disputes. The short answer is no: a partner generally cannot withdraw partnership funds for personal benefit without the consent of the other partners.
Partners owe each other fiduciary duties, which include a duty to account for all money and property received in connection with the partnership. Under section 29 of Ontario's Partnerships Act, every partner must account to the firm for any benefit derived from conducting the partnership business or from using partnership property, name, or business connections. Withdrawing funds without authorization is a direct breach of this obligation.
Unauthorized withdrawals can take several forms:
- Transferring partnership funds to a personal account
- Using a partnership credit card or line of credit for personal expenses
- Paying personal invoices or debts from partnership accounts
- Diverting payments from partnership clients to a personal account
- Paying excessive or unauthorized compensation to oneself
- Removing partnership assets or equipment without consent
If your partner has withdrawn funds without your consent, you need to act quickly. The longer unauthorized withdrawals continue, the more difficult recovery becomes. Courts can order an accounting of all partnership finances, disgorgement of unauthorized withdrawals, interest on amounts taken, and in cases of deliberate misappropriation, punitive damages.
Suspect your partner is withdrawing funds without authorization? Act immediately.
Unauthorized withdrawals can rapidly deplete partnership assets. In urgent cases, a court can grant an injunction freezing partnership accounts and preventing further withdrawals while the dispute is resolved. Delay reduces the assets available for recovery.
→ Call 1-800-771-7882 nowRecognizing when your partner is trying to push you out
Partners who want to force a co-partner out of the business rarely do so openly. The conduct typically escalates gradually, and many partners do not recognize what is happening until significant harm has already occurred. Common tactics include:
Blocking access to information
Refusing to share financial records, changing passwords on accounting software or banking systems, excluding you from communications with accountants or lawyers, and failing to provide the financial statements you are entitled to as a partner are all forms of information blocking. Under the Partnerships Act, every partner is entitled to inspect and copy the partnership books. Denying that right is a breach of the Act and of your partner's fiduciary duty.
Excluding you from management
Holding meetings without notifying you, making operational decisions without your input, dealing with clients and suppliers as though you do not exist, and refusing to consult you on matters that require joint decision-making are all forms of management exclusion. This conduct, if sustained, may constitute oppressive behaviour giving rise to a claim even if your partnership is not incorporated.
Making commitments that bind the partnership
Because each partner is an agent of the partnership for the purposes of the partnership's business, contracts signed by one partner in the ordinary course of business can bind the partnership and all its partners. A partner who enters significant commitments without your knowledge is not only acting outside your agreement: they are potentially exposing you personally to obligations you never consented to.
Diverting business opportunities
A partner who takes business opportunities that belong to the partnership for their own personal benefit is in breach of fiduciary duty. This includes setting up a competing business, taking clients to a new venture, and diverting referrals away from the partnership. See our related article on what to do when your partner starts a competing business.
Attempting to dissolve or restructure without consent
Attempting to change the fundamental nature of the partnership, bringing in new partners, restructuring the business into a corporation, or taking steps toward dissolution without your agreement are all actions that require your consent under the Partnerships Act and most partnership agreements.
Is your partner systematically excluding you?
The pattern matters as much as any individual act. Achkar Law can review your situation and advise you on whether your partner's conduct gives rise to a breach of fiduciary duty claim and what remedies are available.
→ Speak with a partnership disputes lawyer at Achkar LawYour legal rights and available remedies
If your partner is making decisions without you, excluding you from management, or withdrawing funds without consent, you have several legal claims and remedies available depending on the specific conduct and the terms of your partnership agreement.
Breach of the partnership agreement
If your partner's conduct violates specific terms of the partnership agreement, you have a straightforward breach of contract claim. Remedies include damages for losses caused by the breach and specific performance (a court order compelling your partner to comply with the agreement). The strength of this claim depends heavily on what your agreement actually says: vague or poorly drafted agreements create uncertainty about what each partner's obligations are.
Breach of fiduciary duty
Partners owe each other fiduciary duties that exist independently of any written agreement. These duties require each partner to act in good faith, to act in the best interests of the partnership rather than their own interests, to account for all partnership property and benefits, and to avoid conflicts of interest. Breaching these duties gives rise to a claim for compensation for losses caused, disgorgement of any profits the partner gained from their breach, and in serious cases, punitive damages.
Accounting
You are entitled to a full accounting of all partnership finances: every transaction, every withdrawal, every asset and liability. If your partner has been concealing financial information, a court can order a complete accounting and require your partner to produce all records. This remedy is particularly important where unauthorized withdrawals are suspected.
Injunctive relief
Where your partner's unilateral conduct is ongoing and causing continuing harm, an injunction can stop it immediately. Courts can order your partner to cease making unauthorized decisions, restore your access to accounts and records, and freeze partnership assets pending resolution of the dispute. In urgent cases, an injunction can be obtained on short notice.
Forced buyout or dissolution
Where the relationship has broken down irreparably, courts can order a buyout of either partner's interest at fair value, or dissolution of the partnership with a fair division of assets. Dissolution does not necessarily mean the business ends: it can be restructured or acquired as part of the process. Which remedy is more appropriate depends on the value of the business, the nature of the dispute, and each partner's goals.
Steps to take right now
Step 1: Do not signal acceptance of the situation
Continuing to act as though nothing is wrong, accepting your partner's unauthorized decisions without objecting, or participating in arrangements your partner has set up without your consent can be interpreted as tacit agreement. Before doing anything, get legal advice. What you say and do in the early stages of a partnership dispute can significantly affect your legal position.
Step 2: Review your partnership agreement
Your partnership agreement is the primary document governing your rights. Read it carefully for provisions about decision-making authority, information rights, dispute resolution requirements (many agreements require mediation or arbitration before court proceedings), and any deadlines you may be subject to. If you do not have a copy, you are entitled to one.
Step 3: Document everything
Preserve all evidence of the conduct you are concerned about: emails, text messages, bank records, accounting documents, correspondence with clients or suppliers, and any records of decisions made without your knowledge or consent. Evidence that exists now may not exist later if your partner is aware the dispute is escalating.
Step 4: Consult a commercial litigation lawyer immediately
Partnership disputes move quickly, and the wrong step at an early stage can significantly weaken your position. A litigation lawyer can assess your situation, advise you on your rights under the partnership agreement and the Partnerships Act, and take urgent action where needed to protect your interests before further harm occurs.
Step 5: Consider a formal demand letter
A demand letter from a lawyer puts your partner on formal notice of their legal obligations, documents that you asserted your rights promptly, and often prompts a negotiated resolution without the need for court proceedings. It also triggers any contractual dispute resolution timelines in your partnership agreement.
Partnership disputes in British Columbia
BC partnerships are governed by the Partnership Act (RSBC 1996, c. 348) rather than Ontario's Partnerships Act. The principles are substantially similar: partners have equal rights in management unless the partnership agreement provides otherwise, and partners owe each other fiduciary duties of good faith and loyalty.
BC courts have the same broad remedial powers as Ontario courts in partnership disputes, including the ability to order accounting, injunctions, buyouts, and dissolution. The procedural rules differ in their specifics, and if your partnership operates in BC, you should work with a lawyer familiar with BC Supreme Court procedure and BC partnership law.
One notable difference: BC's partnership legislation does not contain an equivalent to the oppression remedy found in corporate statutes. Partnership disputes in BC are therefore governed primarily by the partnership agreement, the Partnership Act, and common law fiduciary duty principles rather than a statutory oppression framework.
Frequently asked questions
Can my business partner make decisions without me?
In most cases, no. Under Ontario's Partnerships Act, all partners have equal rights in management unless the partnership agreement provides otherwise. For ordinary matters, a majority decision is required. For fundamental changes, all partners must consent. A partner who acts unilaterally on significant matters may be in breach of the partnership agreement and their fiduciary duties.
Can my business partner push me out of the partnership?
Not lawfully, unless your partnership agreement contains an expulsion clause permitting it. A partner who attempts to force another out through exclusion, denial of access to information, or unilateral action is likely in breach of fiduciary duty and the partnership agreement. Courts in Ontario can order restoration of access, a forced buyout, or dissolution with a fair division of assets.
Can my business partner withdraw funds without my consent?
Generally no. Partners owe fiduciary duties to each other and must account for all money received in connection with the partnership. Unauthorized withdrawals breach section 29 of Ontario's Partnerships Act and the partner's fiduciary duty. Remedies include a court-ordered accounting, recovery of funds withdrawn, interest, and in cases of deliberate misappropriation, additional damages.
What should I do if my business partner is trying to force me out?
Act quickly and carefully. Do not signal acceptance of the situation. Review your partnership agreement, document all evidence of the exclusionary conduct, and consult a commercial litigation lawyer before taking any steps that could be construed as agreeing to the situation. Legal options include fiduciary duty claims, injunctions, accounting, and applications for a buyout or dissolution.
What happens if one partner makes a bad decision that harms the partnership?
If the decision was made within the partner's actual or apparent authority, the partnership may be bound by it and all partners may share the consequences. If the decision was unauthorized, the partner who made it may be personally liable to the partnership and to the other partners for any resulting losses. This is one reason why having a clear partnership agreement defining each partner's authority is so important.
What is a breach of fiduciary duty in a partnership?
Partners owe each other fiduciary duties requiring them to act in good faith and in the best interests of the partnership. Excluding a partner from decisions, concealing financial information, diverting business opportunities, withdrawing funds without authorization, and acting to benefit oneself at the partnership's expense are all examples of conduct that can constitute a breach of fiduciary duty, giving rise to claims for compensation and disgorgement of profits.
Your partner is making decisions without you. Here is what to do today.
Being sidelined in your own partnership is not just frustrating: it is legally actionable. Whether your partner is withdrawing funds without consent, excluding you from management, or actively trying to push you out, Ontario and BC law give you meaningful tools to stop the conduct, recover what you are owed, and reach a fair resolution.
Achkar Law represents partners across Ontario and British Columbia in partnership disputes, including breach of fiduciary duty claims, unauthorized withdrawal recovery, injunctions, and partnership dissolution. We will review your agreement and your situation, advise you honestly on your options, and take the steps needed to protect your interests before the situation deteriorates further.
Speak with a partnership disputes lawyer at Achkar Law | Call 1-800-771-7882