Failure to have a proper and legally binding operating agreements, may actually only serve to make intra-company owners disputes much harder to amicably resolve, with regards to Limited Liability Companies.

 

John Kiritsis, Esq., CPA, MBA, MS, JD, LL.M

 

Kiritsis Law Group  

212 922 0005

 

Disputes within a limited liability company (LLC) can arise for a variety of reasons, including disagreements over business decisions, financial issues, or management problems. In the state of New York, there are several options available for resolving LLC disputes.

 

Mediation

Mediation is a voluntary, confidential process in which a neutral third party, known as a mediator, helps the parties to a dispute reach a mutually acceptable resolution. Mediation can be an effective way to resolve disputes within an LLC because it allows the parties to come to an agreement on their own terms, rather than having a resolution imposed upon them by a court.

 

Arbitration

Arbitration is a process in which a neutral third party, known as an arbitrator, hears both sides of a dispute and makes a binding decision. Arbitration is often faster and less expensive than going to court, allowing the parties to choose an arbitrator with expertise in the specific area of the dispute.

 

Litigation

If mediation and arbitration are unsuccessful in resolving an LLC dispute, the parties may choose to go to court. In New York, LLC disputes are typically handled in civil court. The court will hear both sides of the dispute and make a decision based on the evidence presented.

 

Dissolution

If an LLC dispute cannot be resolved, the parties may choose to dissolve the LLC. Dissolution involves winding up the LLC's affairs, distributing its assets, and closing the business.

 

It is important to remember that LLC disputes can be costly and time-consuming, and they can have a negative impact on the business. To avoid disputes, it is a good idea for an LLC to have an operating agreement in place that sets out the rules and procedures for operating the business. An operating agreement can help to prevent disputes by providing clear guidance on decision-making, financial matters, and management issues.

 

In conclusion, there are several options available for resolving LLC disputes in the state of New York, including mediation, arbitration, litigation, and dissolution. To avoid disputes, it is important for an LLC to have an operating agreement in place that sets out the rules and procedures for operating the business. By considering these options and taking steps to prevent disputes, you can ensure that your LLC is run smoothly and successfully.

 

 

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The views expressed by this author are not legally binding or reflective of the author, the author’s firm, the author’s employers, the author’s employees, or any individual and/or organization.