What Is a Business Control Dispute?
Control disputes arise when owners disagree about who has authority to act for the company. One owner may change passwords, take over bank accounts, fire a co-owner or call a meeting to remove directors. Because control determines access to money and information, these disputes often require immediate legal action.
Common Business Control Disputes
- An owner locked out of the business, its accounts or systems
- Board or manager deadlock on key decisions
- Disputes over voting rights and proxies
- Removal of directors, officers or LLC managers
- Contested meetings, consents and elections
- Takeover of bank accounts or payment processors
- Unauthorized changes to the company agreement or bylaws
How Texas Law Resolves Control Disputes
Courts look first at the certificate of formation, company agreement or bylaws, and any voting or shareholder agreements. Texas law sets default rules for meetings, notice, quorum and voting when documents are silent. When a corporation is deadlocked and suffering irreparable harm, a court may appoint a receiver in limited circumstances, and a court may order a partnership or LLC wound up when it is not reasonably practicable to carry on.
Emergency Relief in Control Disputes
Time matters. We seek temporary restraining orders and temporary injunctions to restore access, prevent unauthorized transactions, preserve records and maintain the status quo while the dispute is resolved. Certain high-value governance disputes may also qualify for the Texas Business Court, which has a division in Dallas.
Steps to Take If You Lose Control of Your Company
Document what changed and when, including password changes, account access and any notices received. Do not retaliate by moving funds or locking out the other owner. Gather the governing documents and contact a business litigation attorney promptly, because the strength of an emergency request often depends on how quickly you act.
How We Resolve Control Disputes
We review governing documents and records, identify who holds lawful authority, and pursue the fastest route to stability, whether that is a negotiated agreement, mediation, a business divorce or litigation.
Business Control Dispute Attorneys in Dallas and Texas
AbsolutLAW represents owners in Dallas, Fort Worth, Plano, Frisco, Houston, Austin and San Antonio. Schedule a free consultation or call 214-935-1628.
Business Control Disputes: Frequently Asked Questions
Can my business partner lock me out of the company?
Not legally if you have management or access rights under the governing documents. Courts can order access restored through injunctions.
What happens when a 50/50 company is deadlocked?
Owners can negotiate, mediate, use buy-sell provisions or seek court remedies such as receivership or winding up in limited circumstances.
Can shareholders remove a director in Texas?
Yes. Texas law generally allows shareholders to remove directors by vote, subject to the certificate of formation and bylaws.
Can I get a court order to stop my partner from using company accounts?
Yes. A temporary restraining order can freeze or restrict account use when there is a risk of harm to the business.
How quickly can a control dispute be heard in court?
A temporary restraining order can sometimes be obtained within days, with a temporary injunction hearing usually set within about two weeks.