In a Georgia LLC, a court may dissolve the company only when it is not reasonably practicable to carry on the business under its articles or written operating agreement (O.C.G.A. § 14-11-603(a)). Most co-owner disputes are settled first through records demands, negotiation and buyouts. Parisi Law Firm helps Northeast Georgia owners work through all of it.
Most business partnerships start with a handshake and a shared plan. Years later, one partner feels they carry the workload while the other collects the same draw. Or the two of you are deadlocked on a big decision. Or you find out your partner has quietly started a competing company and is calling your customers. For a roofing crew, an HVAC shop or any small business with two or three owners, a fight at the top can freeze the whole company.
Georgia treats LLCs, corporations and general partnerships differently, and the rules changed on July 1, 2026. Jerry Parisi helps co-owners across Jefferson, Jackson County and Northeast Georgia figure out where they stand, get the records they are entitled to, and push toward a buyout, a negotiated exit or, when needed, a court remedy.
What usually starts a co-owner dispute
- Money: unequal draws, unexplained expenses, personal spending on the company card, or distributions that stopped
- Work effort: one owner runs the jobs and the other has checked out, but ownership is still split evenly
- Deadlock: two 50/50 owners who can't agree on hiring, borrowing, pricing or selling
- A partner starting a competing company, or bidding jobs on the side
- Taking customers, employees or company equipment on the way out
- Retirement, divorce, illness or death, when no buy-sell terms were ever agreed
First steps: read the agreement and secure the records
Start with your operating agreement, shareholder agreement or partnership agreement. Georgia gives LLC operating agreements wide latitude: state policy is to give maximum effect to freedom of contract and to the enforceability of operating agreements (O.C.G.A. § 14-11-1107(b)). That means your agreement may control voting, buyouts, valuation, non-competition and how disputes must be resolved, and it may override the default rules described below.
Next, preserve the paper trail. Save bank statements, QuickBooks files, tax returns, emails and texts before anyone deletes them. Don't move money out of company accounts, lock your partner out, or tell customers the company is splitting up until you have advice. Self-help moves like these often become the other side's best evidence.
Your right to inspect company records, and the July 2026 changes
LLC members: by default, a member may inspect and copy any company record on reasonable request during ordinary business hours and may obtain the company's tax returns (O.C.G.A. § 14-11-313). If the company refuses, the member can ask the superior court for a show-cause order, and the court may award fees.
Corporate shareholders: basic corporate records are open on written notice given at least five business days in advance. Board minutes, accounting records and the shareholder list require a demand made in good faith and for a proper purpose, described with reasonable particularity, for records directly connected with that purpose (O.C.G.A. § 14-2-1602).
HB 1185 changed these rules for claims filed on or after July 1, 2026:
- A proper purpose no longer includes an active or pending derivative suit, or a lawsuit in which the company and the member or shareholder are adverse. In other words, a records demand can't be used as a substitute for discovery in a case that's already underway.
- LLC members now have a right to the company's financial statements. Other information must be demanded for a proper purpose.
- Fee shifting now runs both ways: a member or shareholder who makes an inspection demand in bad faith can be ordered to pay fees.
- A corporation's articles or bylaws may now require internal entity claims to be filed only in the Georgia State-wide Business Court, and many owner disputes, including LLC records proceedings, may now be brought there.
Negotiated buyouts and mediation
Most co-owner disputes end with one owner buying the other out. A buyout keeps the company, its customers and its crews intact, and it usually costs far less than litigation. If you have buy-sell terms, they may set the price, the valuation method and the payment schedule. Georgia corporations can restrict share transfers and give the company or other shareholders a right to buy restricted shares (O.C.G.A. § 14-2-627). If you never put those terms in writing, see our buy-sell and succession planning page for what to fix once the dust settles.
Mediation is often the fastest way to reach a buyout. A neutral mediator helps both owners work through valuation, non-compete terms, releases and who keeps which trucks, contracts and phone numbers. Nothing is binding unless you both sign. Check your agreement first: it may require mediation or arbitration before anyone can sue.
Judicial dissolution: when a court can end the company
LLCs: on application by or for a member, a court may dissolve an LLC whenever it is not reasonably practicable to carry on the business in conformity with the articles of organization or a written operating agreement (O.C.G.A. § 14-11-603(a)). That is the only standard. Georgia's LLC statute has no separate list of grounds such as deadlock, oppression or waste, so the facts have to show the business can't reasonably continue as the owners agreed.
Corporations: a shareholder may seek dissolution under O.C.G.A. § 14-2-1430(2) only on these grounds:
- The directors are deadlocked, the shareholders can't break the deadlock, and irreparable injury is threatened or suffered, or the business can no longer be run to the shareholders' advantage
- Those in control have acted in a manner that is illegal or fraudulent, and the case is brought by holders of at least 20 percent of all outstanding shares
- The shareholders are deadlocked in voting power and have failed to elect directors for at least two consecutive annual-meeting dates
- Corporate assets are being misapplied or wasted
- Ordinary Georgia corporations have no "oppression" ground for dissolution. An oppression or unfair-prejudice claim, and a court-ordered purchase of a shareholder's shares at fair value, are available only for statutory close corporations (O.C.G.A. §§ 14-2-940, 14-2-942).
Derivative suits: claims on behalf of the company
When a co-owner harms the company itself, for example by diverting jobs or draining accounts, the claim often belongs to the company rather than to you personally. A shareholder can't file a derivative case until a written demand has been made on the corporation and 90 days have passed, unless the demand is rejected sooner or waiting would cause irreparable injury to the corporation (O.C.G.A. § 14-2-742).
LLCs have the same written demand and 90-day wait (O.C.G.A. § 14-11-801). The member must also have been a member at the time of the transaction and must fairly and adequately represent the company. A demand letter drafted with care matters, because it frames the case the company, and later a court, will look at.
Fiduciary duties between co-owners
LLC members and managers must act in a manner they believe in good faith to be in the best interests of the company, with the care an ordinarily prudent person in a like position would exercise (O.C.G.A. § 14-11-305). An operating agreement can expand, restrict or even eliminate those duties, but it can't eliminate liability for intentional misconduct, a knowing violation of law, or a personal benefit taken in breach of the operating agreement.
In a general partnership, every partner must account to the partnership for any benefit, and hold as trustee any profits, taken without the other partners' consent from a transaction connected with the partnership or from use of its property (O.C.G.A. § 14-8-21(a)). Partners also owe one another true and full information about all things affecting the partnership (O.C.G.A. § 14-8-20). A partner who secretly competes or steers customers away may face claims under these duties, and under any non-compete or non-solicitation agreement they signed.
How Parisi Law Firm helps
You work directly with Jerry Parisi, not a case manager. Call (404) 594-5130 or visit our office at 218 Athens Street in Jefferson to schedule a consultation about your co-owner dispute. We can:
- Review your operating, shareholder or partnership agreement and explain your options in plain English
- Draft and respond to records demands under the post-July 2026 rules
- Value your position and negotiate a buyout, including payment terms, releases and non-compete terms
- Represent you in mediation or arbitration
- Pursue or defend dissolution, derivative and fiduciary-duty claims in court
Georgia LLC vs. corporation: dispute tools at a glance
| Tool | LLC | Corporation |
|---|---|---|
| Records inspection | Inspect and copy any record on reasonable request; tax returns (§ 14-11-313) | Basic records on 5 business days' written notice; minutes, accounting records and shareholder list need a proper purpose (§ 14-2-1602) |
| 2026 proper-purpose limit (HB 1185) | Not tied to a pending derivative suit or adverse lawsuit; members now get financial statements | Not tied to a pending derivative suit or adverse lawsuit |
| Judicial dissolution | One test: not reasonably practicable to carry on the business under the articles or operating agreement (§ 14-11-603(a)) | Four listed grounds: director deadlock, illegal or fraudulent conduct (20% holders), failure to elect directors, waste of assets (§ 14-2-1430(2)) |
| Oppression / court-ordered buyout | No statutory oppression ground | Only for statutory close corporations (§§ 14-2-940, 14-2-942) |
| Derivative suit | Written demand, then a 90-day wait (§ 14-11-801) | Written demand, then a 90-day wait (§ 14-2-742) |
| Fiduciary standard | Good faith and ordinary prudence; can be modified by written operating agreement (§ 14-11-305) | Set by the corporate code, articles and bylaws |
Frequently Asked Questions
Can I force my business partner out of our Georgia LLC?
Usually not directly, unless your operating agreement allows expulsion or a forced buyout. Without that, your options are a negotiated buyout, mediation, or asking a court to dissolve the company, which requires showing it is not reasonably practicable to carry on the business under the articles or written operating agreement (O.C.G.A. § 14-11-603(a)).
Can I see the books if my partner controls the company?
Yes, in most cases. An LLC member may inspect and copy company records on reasonable request under O.C.G.A. § 14-11-313, and shareholders have inspection rights under § 14-2-1602. Since July 1, 2026, a demand tied to a pending lawsuit against the company is not a proper purpose, and bad-faith demands can shift fees.
Is shareholder oppression a ground to dissolve a Georgia corporation?
Not for an ordinary corporation. O.C.G.A. § 14-2-1430(2) lists deadlock, illegal or fraudulent conduct (brought by at least 20 percent of shares), failure to elect directors, and waste of assets. Oppression claims and court-ordered share purchases apply only to statutory close corporations under §§ 14-2-940 and 14-2-942.
My partner started a competing company. What can I do?
Act quickly and preserve evidence. Depending on your entity, your partner may owe duties of good faith (LLCs, O.C.G.A. § 14-11-305) or a duty to account for profits (partnerships, § 14-8-21). A signed non-compete or non-solicitation agreement may add claims. The harm may belong to the company, which can require a derivative demand.
How long does a derivative demand take in Georgia?
You must make a written demand on the company and wait 90 days before filing, unless the company rejects the demand sooner or waiting would cause irreparable injury. That rule applies to corporations under O.C.G.A. § 14-2-742 and, with added requirements, to LLCs under § 14-11-801.
What is the Georgia State-wide Business Court's role in owner disputes?
Under HB 1185, effective July 1, 2026, a corporation's articles or bylaws may require internal entity claims to be filed only in the Georgia State-wide Business Court. Many owner proceedings, including LLC records disputes, may now be brought there as well. Check your governing documents before choosing where to file.
Is a buyout better than dissolving the business?
Often, yes. A buyout keeps the company, its customers and its crews working, and it usually costs less than litigation. Your buy-sell terms may already set the price and payment schedule. Dissolution ends the company and divides what is left, which can destroy value both owners built.