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LLC Membership Disputes

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Our LLC member disputes lawyers represent clients in all types of disagreements relating to oppressive and improper conduct, freeze-outs, and improper termination.

We understand that partnering with like-minded colleagues often leads to tremendous success, but sometimes the more members involved the greater the risk for disputes, even among longtime friends turned LLC members.

Unfortunately, closer relationships can make for extremely emotional and bitter disputes that can jeopardize more than the LLC, but both the past and future success of the business.

If you are involved in an LLC member dispute of any type, the key to a successful outcome may hinge on speaking with a skilled business litigation attorney who can help diffuse the existing challenge and help reduce the risk of future disputes between members.

Our LLC member dispute lawyers provide both real-time and long-term legal solutions that focus on the company operating optimally while the disagreement is addressed in private, so it does affect the rest of the business’s interests.

What are the Most Common LLC Member Disputes?

Our LLC member dispute attorneys focus on protecting our clients’ rights and best interests, so they can achieve the personal and professional success they are entitled to, inside or outside their partnerships.

Our experience tells us that all LLC member disputes are inherently unique, as disputes can arise from alleged breaches of duty to the company to disagreements over the direction of the company, which is why we customize our legal approach for each client’s personal and business circumstances.

Common LLC member disputes may include:

  • Breach of Fiduciary Duty

Fiduciary duty is the obligation that states LLC members must act in the best interest of the LLC and its members.

If one member commits an act that neither furthers nor damages the company’s and/or a member’s interests, it can be considered a breach of fiduciary duty.

When these acts cause harm to the company and/or a member, a member may file suit against the offending member.

  • Self-Dealing

Self-dealing is the act of one or more LLC members taking advantage of their position in the company to advance their personal interests rather than the interests of the business and/or its members.

This typically results in a conflict of interest that can result in major financial damage to the LLC and to affected members.

  • Member Oppression

When an LLC comprises both majority and minority members, member oppression may occur, with the members with larger stakes in the company making decisions that prejudice the interests of the lesser members.

Minority LLC members may have less power than the majority members, but they are still owed a fiduciary duty that the latter will not use their control to put the minority members at a disadvantage.

  • Deadlock Disputes

When an LLC has two members, their interests in the company are often split 50/50. When they cannot agree on an important decision or when a unanimous vote cannot be reached but is required to move forward, the dispute ends in a deadlock. These disputes often have no clear resolutions other than litigation and judicial dissolution.

  • Direct Suit

Direct suits are brought to seek redress for damages, primarily to a member, which were caused by the other members.

  • Derivative Suit

Derivative suits are brought by a member on behalf of the LLC for damages caused by other members or managers, causing damages primarily to the LLC.

A derivative suit is often used to expose wrongdoing like fraud or breach of fiduciary duty within an LLC which causes damage to the LLC.

Can an LLC Member Be Released Without a Remedy or Right to Further Compensation?

Operating agreements typically address the terms regarding the rights and responsibilities of all parties and how the equity will be split in the event of a break-up, split, or dissolution of the LLC.

Each member’s rights in an LLC are determined by the unique details outlined in the operating agreement, which control the rights and duties of the partners unless it conflicts with the Florida Revised Uniform Partnership Act, which addresses how partnerships may be refuted.

How Can The Morgan Law Group Help with LLC Member Disputes?

Our LLC member dispute attorneys provide straightforward advice and legal solutions for our clients, so they understand the reality of their dispute and how it will affect their personal, professional, and financial interests, so they can make informed decisions about their futures.

If you are involved in a dispute with one or more business partners, reviewing your contractual obligations, and partnership agreement, and determining your rights may feel like an overwhelming task. You do not have to face these challenges on your own.

Contact our experienced  LLC member dispute attorneys today by calling (786) 706-9228 to determine which remedies will allow you to move forward with the best legal solutions available for your unique circumstances.