Business Partner Gone Rogue? Here’s What You Can—and Can’t—Do

How to Protect Your Business When a Partner Crosses the Line

You started with trust. Now your business partner is making major decisions without you—or worse, diverting money, breaching agreements, or going silent.

If you feel stuck, you’re not alone. Partnership breakdowns are among the most damaging—and personal—business disputes.

Here’s what you can do, what you can’t, and when to act before it’s too late.

🚨 What Counts as a Partner “Going Rogue”

It’s not always theft. A partner may be breaching their duties if they:

• Withhold financial information
• Sign contracts or loans without your knowledge
• Pay themselves without authorization
• Take client relationships or intellectual property to a new venture
• Sabotage or ignore the business’s obligations

Even if they own 50%, they still have legal duties under NY/NJ law.

📜 Your Partner’s Legal Duties

Unless clearly waived in an agreement, partners and LLC members owe each other:

• Fiduciary duty of loyalty — no self-dealing, secret profits, or competing ventures
• Duty of care — not to act recklessly or intentionally harm the business
• Duty to disclose — provide access to books, records, and major decisions

These duties are enforceable—especially when backed by an operating or partnership agreement.

🔎 What You Can Do

• Request books and records — you have the right to inspect
• Send a formal notice — put objections in writing
• Freeze accounts or limit authority — if permitted under your agreement
• File for injunctive relief — to stop damaging conduct before it's too late
• Sue for breach of fiduciary duty or dissolution — as a last resort

🚫 What You Can’t Do (Safely)

• Drain business accounts yourself — even if you feel justified
• Lock them out without cause — unless your agreement or a court allows it
• Keep silent — silence may be used against you as waiver

Retaliating or going rogue yourself often backfires—legally and financially.

🧠 Strategic First Steps

Before going to court or calling it quits:

1. Gather documents: financials, communications, agreements
2. Document what’s happening: in real time, clearly and calmly
3. Consult a litigation attorney to assess leverage and options

The Bottom Line

You don’t need to tolerate a partner’s bad behavior—but you do need to handle it the right way.

Handled strategically, these situations can result in resolution, buyout, or legal protection before more damage is done.

Dealing with a business partner who's acting against your interests? Book a 15-minute paid consult with JDE Law Firm, PLLC today.

🔗 Schedule a Consultation