Legal Question in Business Law in New Jersey

Can you force a business partner out?

Hi, I work for an LLC where the business is owned by three sisters who are currently in dispute and cannot get along on anything. They each own 33 1/3 percent of the business with two sisters ( #1 & #2)being managing partners and one sister as a non managing partner (#3). In the past few months one of the managing partners (#2) has refused to come into the office and has been working from home. All three no longer speak and communicate through the employees. The non managing partner (#3) opened a separate bank account with only the knowledge of the AWOL managing partner (#2), and has been rerouting accounts receivable checks into this account that partner #1 has no access to. They are now trying to force #1 out of the partnership and refuse mediation, but continue their shenanigans behind the scenes engineered to oust #1. What legal standing does #1 have, and are their banking actions legal?


Asked on 11/13/08, 3:27 pm

3 Answers from Attorneys
Laura Mann Law Offices of Laura S. Mann, LLC

Re: Can you force a business partner out?

First, for your protection, I would caution you to stay out of the fray on this one. You inadvertantly could get tangled into a web you do not wish to be in, and inadvertantly could expose yourself to liability. As far as whether #1 has the legal right to divert funds into a secret account, the answer is probably not. Based on the limited facts, I cannot give a firm answer, though if the other sister wants some legal advice (it's really her issue, not yours since you're an employee only) then she's welcome to contact me (or any attorney of her choosing) for an appointment. Either way, best of luck to everyone.

Read more
Answered on 11/13/08, 3:38 pm
Jef Henninger, Esq Law Offices of Jef Henninger, Esq.

Re: Can you force a business partner out?

You should really speak to an attorney about all of your issues. I would have to refer you to another attorney due to my current caseload.

Read more
Answered on 11/13/08, 3:42 pm
Barry Kozyra Kozyra & Hartz, LLC

Re: Can you force a business partner out?

There should be an Operating Agreement that defines what happens with these disputes involving the LLC. Whether it does or does not have helpful provisions, #1 may have minority shareholder rights against #2 and #3. She should consult with counsel ASAP to develop an understanding of her rights and a strategy to protect her rights. We do have attorneys at the firm who could be helpful in this area.

Disclaimer: Your question and any response given are not intended to create an attorney-client relationship. The response given is not intended to be relied upon by you or anyone else as it is based only on the limited information which you have provided. Other information is needed before advice can be given including facts which you have not supplied which may change the response to your question. You should consult with an attorney as soon as possible to assess your legal rights so as not to prejudice yourself.

Read more
Answered on 11/13/08, 3:48 pm


Related Questions & Answers

More Business Law questions and answers in New Jersey