New York Partnership Disputes: Fiduciary Duties and Obligations Between Partners and Shareholders
A Critical Legal Right for Partners and Shareholders: Fiduciary Rights Imposed by Law
If you are a partner or shareholder of a New York business and you are faced with a "partnership dispute" it is important that you understand your legal rights, including the "fiduciary duties and obligations" owed between the partners and shareholders of closely-held New York corporations and partnerships.
A Duty Of Good Faith And Loyalty When Dealing With Partners
In addition to the legal rights and obligations defined and created by your partnership or shareholder agreement (if one exists) and the New York Business Corporation Law, the legal rights and obligations between shareholders and partners of closely held corporations is governed, substantially, by the common law fiduciary duties and obligations imposed by New York courts. Under New York law partners and shareholders owe a fiduciary duty and obligation to one another and to their mutually owned business. This fiduciary duty and obligation imposes on each partner / shareholder an undivided duty of loyalty and good faith when maintaining and dealing with the assets of the business.
Among other things, a partner's common law fiduciary duty precludes a partner, from:
- Misappropriating assets belonging to the company;
- Diverting assets belonging to the company; and
- Misappropriating "business opportunities" belonging to the company.
If you are currently involved in a partnership or shareholder dispute, it is critical to understand that your legal rights and remedies may be significantly more extensive than you believe. From a tactical standpoint, the invocation of your common law rights as a "fiduciary" (both on your own behalf and on behalf of your company) may be utilized to maintain your business as a going concern and prevent your partner from diverting business assets and business opportunities.
If you have questions about preserving and defending your partnership, shareholder and equity interests in New York or New Jersey, contact Partnership and Shareholder Attorney, Charles N. Internicola, Esq. at 800.976.4904 to learn about his proven representation of business and equity owners.
For additional articles and information about New York partnership law and tactics for dealing with partnership and shareholder disputes read "Partnership Lawsuits in New York: Important Factors to Discuss with Your Lawyer" and "Grounds for Dissolution of a New York Corporation".