Closely Held Business Disputes Between Owners

Many business owners have no plans to offer shares of stock in their company to the public, but still want to reap the benefits of the corporate business structure. Many states allow the creation of a particular type of corporation, known as a “closely-held” corporation. Other businesses, including corporations and limited liability companies (LLCs), may have many of the features of a closely-held corporation without a separate legal category. When disputes arise between owners of a closely-held business, they can threaten the continued daily operations of the business, thereby threatening its future. Even seemingly mild disagreements can grow and jeopardize the business. An experienced Chicago business dispute attorney can assist an owner in a dispute, or can help the business owners find an amicable resolution to their dispute, with an eye towards maintaining business operations.

Closely-Held Corporations

The number of owners in a closely-held business generally number in the single to double digits. The Internal Revenue Service defines a “closely-held corporation” in part as a corporation in which no more than five individuals own over half of the outstanding stock. Laws governing closely-held corporations vary from state to state, with some states counting them among other corporations rather than as a separate business form. States that recognize closely-held corporations as a distinct type of entity may have restrictions on the issuance or transfer or stock, such as a requirement that a departing shareholder sell stock back to the corporation. These restrictions may play an important role in how owners handle disputes among themselves.

Disputes Within Closely-Held Corporations

The rights of minority shareholders, who may assert claims against the majority in certain situations, form the basis of many disputes within closely-held businesses. Other disputes may arise with regard to business operations, employment, compensation decisions, sale of the stock of a divorcing owner, purchase or sale of real estate or other assets, tax issues, or matters pertaining to bankruptcy. Our business dispute lawyers can guide Chicago clients through any of these complicated situations.

Dispute Resolution for Closely-Held Corporations

Owners of a closely-held business should seriously consider submitting company disputes to alternative dispute resolution (ADR). Our team of business lawyers includes several trained and certified mediators and arbitrators. These procedures allow business owners to keep their disputes private, as ADR proceedings take place outside of the court system and are not matters of public record. ADR can also be faster than litigation, as it does not depend on the overburdened courts’ schedules. Finally, the expense of ADR may be significantly less than the costs commonly associated with litigation.

Litigation of Closely-Held Corporation Disputes

Business owners cannot always resolve their disputes outside of court, and our team has extensive experience guiding clients through the court system. While litigation can be a long and drawn-out process, some business disputes require quick action. Emergency litigation measures like temporary restraining orders, preliminary injunctions, and declaratory judgments can help business owners preserve their rights and protect the business.

The Chicago business dispute lawyers of Lubin Austermuehle, P.C. represent companies throughout Illinois, Indiana, and Wisconsin, particularly in the greater Chicago area and DuPage County. For more than twenty-five years, we have assisted owners of closely-held businesses assert their rights and resolve disputes. Contact us today via email, at 630-333-0333, or locally at 630-333-0333 to schedule a consultation with a business dispute attorney in Chicago or Elmhurst, Illinois.

Client Reviews
"I was referred to Peter Lubin from someone in the car business to handle a law suit. From the moment I made the appointment Peter and his staff were outstanding. This wasn't an easy case, most lawyers had turned me down. However, Peter took the time to meet with me and review everything. He took on the case, and constantly communicated with me about updates and case information. We beat this non-compete agreement case in record time. I would use him again and recommend him to my closest family and friends. 5 stars is not enough to thank him for his service." Sebastian R.
"I worked on two occasions with Peter Lubin and his staff. They took their time with me and discussed each and every item in detail. The group makes you feel like you are part of the family and not just another hourly charge. I recommend Peter to anyone who asks me for a referral. If you are looking for a top notch attorney at a reasonable rate, look no further than Lubin Austermuehle." Kurt A.
"Excellent law firm. My case was a complicated arbitration dispute from another state. Was handled with utmost professionalism and decency. Mr. Peter Lubin was able to successfully resolve the case on my behalf and got me a very favorable settlement. Would recommend to anyone looking for a serious law firm. Great staff and great lawyers!" Albey L.
"I have known Peter Lubin for over 30 years. He has represented me on occasion with sound legal advice. He is a shrewd and tough negotiator leading to positive outcomes and averting prolonged legal hassles in court. He comes from a family with a legal pedigree and deep roots in Chicago's top legal community. You want him on your case. You need him on your opponents case. He won't stop fighting until he wins." Christopher G.
"Peter and his team helped us with an auto fraud case. They communicated well (timely and very responsive), investigated deeply, and negotiated a very good settlement. We were able to resolve our significant issue without a large burden and in a manner that allowed for us to come out ahead. I'd recommend Peter and his team strongly!" R.J. Callahan
"Peter was really nice and helpful when I came to him with an initial question about a non-compete. Would definitely reach out again, recommended to everyone." Johannes B.