What Happens When A Business Partner Locks You Out Of An Ohio Company?

Arguments between business partners can easily get out of hand. In difficult situations, one partner may find themselves blocked from the property, denied access to company bank accounts, deprived of financial information, have passwords changed, or even be told they are no longer working for the company.

Being denied access does not always mean that you are no longer an owner or manager of the business. Ohio law, the company’s by-laws, and the specifics of the situation can determine how you might act next.

Start with the company’s governing documents 

One key document to review for an Ohio LLC is its operating agreement. This document can include details on ownership interests, management rights, voting, and how to handle disputes.

Some of the same rules apply to corporations, as they are incorporated into their bylaws or shareholder agreements.

Usually, a business partner does not have the right to declare a partner no longer part of the business. However, it can be difficult to prove that someone has been deprived of the right to participate in managing the business.

Access to company records can become an issue 

Lockouts do not necessarily occur in the literal sense of the term. The owner may have access to the business office but be denied access to information about the company’s operations.

Ohio law provides LLC members and corporate stockholders with rights to access company records and information.

Such access becomes essential when there is suspicion of misappropriation of funds, misuse of business resources, or other irregularities, such as unauthorized payments or excess payments.

Documentation such as financial statements, tax returns, contracts, and bank statements is useful in this process.

Court intervention may be necessary 

In some cases, ownership disputes can be resolved through negotiation. In other cases, immediate court action becomes necessary.

For instance, a minority owner can file for an injunction when the other owners do something that could cause severe or irrevocable damage to the business or the excluded owner’s rights. Under certain conditions, litigation can also involve contractual breaches, breaches of fiduciary duty, misuse of company resources, or a request for an accounting.

The remedy depends largely on the business structure and the nature of the dispute.

Owners should exercise caution when responding to the lockout and avoid extreme measures such as using company money, deleting files, interfering with operations, or attempting to take control themselves. Such actions can later prove significant in litigation.

Protecting your rights during an Ohio business dispute 

If the owner is physically locked out of the company, the consequences can be dire. You can lose income, investments, financial information, and the future value of your ownership. If you encounter this type of problem, you should preserve all emails, text messages, company agreements, and any other relevant paperwork related to the company and the situation at hand. An Ohio business litigation attorney will review the company’s documents, determine the owner’s rights, and recommend the best path forward.

This is especially important in cases involving company property, customer relations, and/or financials.

Talk to a Columbus, OH, Business Litigation Attorney 

Kohl & Cook Law Firm, LLC represents the interests of Ohio businesses in disputes involving owners or executives. Call our Columbus business litigation lawyers today to schedule an appointment, and we can begin defending your interests right away.