Shareholder and partnership disputes · Dallas, Texas
When the Fight Is With the People Who Own the Company With You
A dispute between owners threatens the business itself, not just a contract. The Texas Business Organizations Code, the company's own agreement and the remedies a court can order decide who stays, who is paid and what the company is worth.
- Shareholder, Hallett & Perrin, P.C.
- Owners bringing claims and owners defending them
- LLCs, partnerships and closely held corporations
How owner disputes usually begin
Few partners plan to end up in court. These are the situations that bring them there.
- 01A partner is taking money or paying himself firstDistributions stop while a controlling owner's salary, expenses or related-party payments grow.
- 02You are being denied the books and recordsTexas gives members and shareholders a statutory right to inspect company records. A refusal is itself a claim.
- 03You were pushed out of the company you builtRemoved as manager, locked out of accounts, cut off from pay. The company agreement and the Business Organizations Code say what the majority can and cannot do.
- 04A 50/50 partnership is deadlockedNeither owner can act without the other, and neither will move. Texas courts have limited tools for deadlock, so the agreement and negotiated exits matter.
- 05The buyout price is the fightBoth sides agree someone should leave. They disagree on the number, the formula in the agreement, or whether the agreement applies at all.
How an ownership dispute is handled
The company has to keep operating while the owners fight. The plan protects the business first, because the client's position depends on it.
The governing documents, read closely
The company agreement, bylaws, partnership agreement and buy-sell provisions are reviewed against the Business Organizations Code. What they say about voting, distributions, removal and transfer controls what a court can do.
Securing the records
Financial statements, bank records, tax returns and minutes are requested under the statutory inspection rights and preserved. If the company refuses, the court can compel production.
Sorting direct claims from the company's claims
Some harms belong to the owner personally; others belong to the company and must be brought derivatively. The choice affects who recovers.
Stabilizing the business
Where money is leaving or decisions are being made unilaterally, a temporary restraining order, a temporary injunction or an agreed standstill holds the position while the dispute is worked out.
Exit, resolution or trial
Most owner disputes end with a negotiated buyout or a mediated settlement. Where an owner has breached a duty or diverted assets, the claims are filed in Dallas County district court, the Texas Business Court or federal court, and tried if needed.
Texas law on disputes between owners
Texas owner disputes are governed by the Business Organizations Code, the entity's own governing documents and a body of court decisions, the most important of which changed the field in 2014. The rules differ by entity type.
The right to see the records
A shareholder of a Texas corporation who has held shares for at least six months, or who holds at least five percent of the outstanding shares, may on written demand stating a proper purpose examine the corporation's books, records of account, minutes and share transfer records under Section 21.218 of the Business Organizations Code. Under Section 21.222, a corporation that refuses a proper demand is liable for the shareholder's costs and attorney's fees in enforcing the right. LLC members and partners have comparable rights to information.
Suing for the company: derivative claims
When an insider harms the company itself, the claim belongs to the company, and an owner brings it derivatively. Texas eases the procedure for closely held entities. Under Section 101.463 of the Business Organizations Code, a limited liability company with fewer than 35 members and no publicly traded interests is "closely held," and the usual demand and standing requirements do not apply to a member's derivative claim against a governing person, member or officer. The court may also treat the claim as a direct action and order recovery paid to the member if justice requires.
Oppression after Ritchie v. Rupe
Before 2014, Texas appellate courts had ordered buyouts as a remedy for minority shareholder oppression. In Ritchie v. Rupe, decided June 20, 2014, the Texas Supreme Court held that there is no independent common-law cause of action for shareholder oppression, and that the statutory remedy for oppressive conduct by those in control, found in Section 11.404 of the Business Organizations Code, is the appointment of a rehabilitative receiver, not a forced buyout. Minority owners still have claims, but they are the traditional ones: breach of fiduciary duty, breach of the company agreement, fraud, and derivative claims for harm to the company. The governing documents, and especially any buy-sell provision, now matter more than ever.
Duties among owners, and what the agreement may change
Partners owe each other duties of loyalty and care under Sections 152.204 through 152.206 of the Business Organizations Code. For limited liability companies, Section 101.401 allows the company agreement to expand, restrict or, since the 2025 amendment, eliminate duties and related liabilities, subject to the provisions Section 101.054 makes non-waivable. Whether an owner owed a duty is answered by reading the agreement, not by assuming; the duties and their remedies are covered on the breach of fiduciary duty page.
Why experience in owner disputes matters
An ownership dispute is a fiduciary case, a contract case and a valuation fight at the same time, with a business that must keep operating in the middle of it.
Tina Wysk represents owners on both sides of partnership and shareholder disputes in Dallas state and federal courts: the minority member cut off from information and distributions, and the controlling owner who has to defend business decisions against accusations of self-dealing. Her practice also covers the fiduciary duty and fraud claims that travel with these cases.
Most of these disputes end with one owner leaving on negotiated terms, so the case is built toward a resolution the client can live with, while being ready for trial if the other side will not move.
The business cost of a dispute
What an owner dispute costs the business
The company pays for the owners' fight long before any judgment.
Decisions that cannot be made
Hiring, borrowing, signing leases and paying distributions stall while owners disagree.
The value of the company itself
A dispute depresses the number both sides are fighting over. Customers leave, key staff look elsewhere and the buyout price falls with them.
Personal finances
Owners who depend on distributions lose income while the case runs. Personal guaranties on company debt do not pause for the dispute.
Family and long relationships
Many closely held companies are owned by family members or old friends. How the dispute is conducted decides what is left of the relationship afterward.
Questions
Questions about partner and shareholder disputes in Texas
Can I sue my business partner in Texas?
Yes, if the partner has breached a duty, breached the agreement or harmed the company. The claim may be your own, for example breach of the partnership agreement, or the company's, brought derivatively, for example diverted funds. Which claims exist depends on the entity type and the governing documents.
Can a minority owner be forced out of a Texas company?
Only through a mechanism the governing documents provide, such as a buy-sell clause or a removal provision, or through a court remedy. Texas has no general statute letting the majority expel a minority owner, and since Ritchie v. Rupe (2014) a court cannot order a buyout as a remedy for oppression. Conversely, a minority owner cannot force a buyout without an agreement that provides one.
Do I have a right to see the company's books?
Yes. A shareholder who has held shares for six months or holds five percent may demand corporate records under Section 21.218 of the Business Organizations Code, and the corporation pays the cost of enforcing that right if it refuses. LLC members and partners have statutory information rights as well, which the company agreement can define but not eliminate.
What is a derivative lawsuit?
A derivative lawsuit is a claim an owner brings on behalf of the company for harm done to the company, such as a manager diverting assets. For closely held LLCs, Section 101.463 of the Business Organizations Code removes the usual demand and standing requirements and lets the court treat the claim as the member's own direct action if justice requires.
Does Texas still recognize minority shareholder oppression?
Not as an independent claim. In Ritchie v. Rupe (2014) the Texas Supreme Court held there is no common-law cause of action for shareholder oppression, and that the statutory remedy under Section 11.404 of the Business Organizations Code is a rehabilitative receiver. Minority owners now rely on breach of fiduciary duty, breach of the company agreement, fraud and derivative claims.
Guides on partner, LLC and shareholder disputes
Answers for owners on both sides, from records access to buyouts and derivative claims.
Shareholder, Partnership & LLC Disputes
A Shareholder's Right to Inspect Corporate Records in Texas
Texas shareholders who have held shares six months, or hold five percent, may inspect corporate books on written demand for a proper purpose. Refusal shifts attorney's fees.
Shareholder, Partnership & LLC Disputes
Asking a Court to Appoint a Receiver or Dissolve a Texas Company
Texas courts can appoint a receiver over one asset, over the whole business, or to liquidate it, and can order a partnership or LLC wound up. Each order has strict grounds.
Shareholder, Partnership & LLC Disputes
Can I Sue My Business Partner in Texas?
Yes. Texas law lets a partner or LLC member sue a co-owner for breach of the agreement, fiduciary duty, fraud or an accounting. The claim, court and deadline turn on the facts.
Shareholder, Partnership & LLC Disputes
Can One Partner Dissolve the Company? Winding Up a Texas LLC or Partnership
Usually not alone. An LLC winds up by majority vote of all members unless the agreement says otherwise. A general partner can withdraw, but the others can keep the business going.
Shareholder, Partnership & LLC Disputes
Can You Force a Partner Out of an LLC in Texas?
Not by default. Under § 101.107 an LLC member may not be expelled unless the company agreement provides for it. Without that clause: a buyout, removal from management, or a court.
Shareholder, Partnership & LLC Disputes
Do Minority Shareholders Have Protection From Oppression in Texas?
Not as a standalone claim since Ritchie v. Rupe (2014). What remains: receivership on narrow grounds plus contract, fiduciary, records and derivative claims.
Protect the company while the owners sort it out
Bring the company agreement, the recent financials and the correspondence. The first conversation identifies your rights, the other side's exposure and the fastest route to a workable exit or resolution.