Question

Can I sue my business partner in South Carolina?

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Christy Ford Allen - Business Litigation - Super Lawyers

Answered by: Christy Ford Allen

Wills Massalon & Allen LLC
Charleston, SC
Phone: 843-727-1144
Fax: 843-727-7696

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In South Carolina as in most states, there are many different types of business arrangements. Understanding what kind of business relationship you have with your business partner or partners is the first step to determining the rights and obligations of business partners to one another. Most businesses fall into one of the following categories: partnership (general or limited), limited liability company (LLC), or corporation (professional, non-profit, statutory close, or public benefit). For South Carolina law on business corporations, see http://www.scstatehouse.gov/code/title33.php.

The second step to determining whether you can sue your business partner is to locate and review any documents that govern the business relationship. For a corporation, those documents are generally called Shareholder Agreements and Bylaws. For an LLC, those documents are called the Operating Agreements. For partnerships, those documents are called Partnership Agreements.

Under certain circumstances, an owner in a business has a right to sue other owners to dissolve or end the corporation. Some owners may have the right to sue other owners for shareholder oppression or breach of fiduciary duty. As an owner, you may be able to sue for the value of your shares or membership interest.   

In a partnership, generally, the law holds each partner to the highest degree of good faith in dealing with his or her other partners related to the business, and does not allow the partners to take advantage of one another by any misrepresentation or concealment. 

In a corporation and LLC, whether one is a director or officer or shareholder, the type of corporation or LLC involved plays an important role in what duties run between owners.  

If you think that you may have a legal claim against a business partner or have been sued by a business partner, consult with a lawyer in your jurisdiction.

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Disclaimer: The answer is intended to be for informational purposes only. It should not be relied on as legal advice, nor construed as a form of attorney-client relationship.

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