The Colorado business lawyers at Thomas P. Howard, LLC regularly litigate disputes involving business entities, whether formed via written contract or by common law. If you are in a dispute with a member, partner or shareholder, or with a third-party, the law governing your dispute will depend on the kind of entity you have, such as a partnership, limited liability company, corporation or cooperative association. These laws provide certain basic “default rules” that will govern even if you have no other agreement in place.
For example, the Colorado Limited Liability Company Act requires each LLC member to account to the LLC for his/her actions and to refrain from self-dealing and from certain conflicts of interest. It also requires members and managers to perform their obligations according to the doctrine of good faith and fair dealing. While LLC members can override many of these “default” rules by adopting an operating agreement, certain legal obligations cannot be changed, like the obligation of good faith and fair dealing.
If you never created any LLC or corporation, you may have a partnership claim depending on the actions of the parties. The Colorado Uniform Partnership Act (UPA) provides that a partnership is formed when two or more persons or businesses associate to co-own a business for profit, regardless of whether or not the persons intend to form a partnership. C.R.S. § 7-64-202. If you are not acting as members of a limited liability company or corporate shareholders, the UPA will govern in the absence of a formal partnership agreement. Among other things, the UPA provides that partners hold fiduciary duties to one another. They must account to the partnership, must refrain from self-dealing, and must refrain from conflicts of interest. C.R.S. § 7-64-401.
Finally, parties may choose to create a corporation as opposed to an LLC or a partnership. The reasons for one or the other are generally tax reasons, but all three have legal protections that apply to the actions of their parties.
Partnership, LLC and shareholder disputes can be very complicated, both legally and factually. The commercial litigation lawyers at Thomas P. Howard, LLC have over 20 years of experience in litigating cases involving each of these types of entities, helping clients determine their rights and obligations related to the same, and filing claims to best protect our clients' interests. Please feel free to email Thomas P. Howard, LLC at [email protected] or just call for a free consultation at (303) 665-9845.