Can I Sue My Business Partner in California? Claims, Remedies, and Timing

Last updated: November 2026

Yes. In California a partner may sue another partner, or the partnership itself, for legal or equitable relief, with or without an accounting, to enforce the partnership agreement and the rights the Corporations Code gives every partner. (Corp. Code, § 16405, subd. (b).) The usual claims are breach of the partnership agreement, breach of fiduciary duty, an accounting, and fraud. Kolmogorov Law, P.C. brings and defends these cases for partners and LLC members in Orange County, Los Angeles, and across California.

Call (909) 235-6116 or contact us online to discuss whether you have a claim against your partner and what it is worth.

What you can sue your business partner for

The statute is broad. A partner may sue to enforce rights under the partnership agreement, to enforce the rights the statute itself creates, and to protect interests that exist independently of the partnership. (Corp. Code, § 16405, subd. (b)(1)-(3).)

Breach of the partnership agreement is the contract claim. It covers unpaid distributions, a capital call that was never honored, a partner who took a salary the agreement did not allow, or a sale of partnership property without the required vote. Our separate page on breach of a partnership agreement walks through the elements.

Breach of fiduciary duty is the tort claim. Every partner owes the partnership and the other partners a duty of loyalty and a duty of care. (Corp. Code, § 16404, subd. (a).) Loyalty means accounting for any profit taken from partnership business or property, not dealing with the partnership on behalf of an adverse party, and not competing with it before dissolution. (Corp. Code, § 16404, subd. (b).) The fiduciary duty guide explains how these claims are proved.

An accounting asks the court to make the partnership open its books and compute what each partner is owed. Fraud covers the partner who lied to get you into the deal or lied about the numbers once you were in. And conversion or civil theft applies when a partner simply takes money or property; see what to do when a partner steals.

Who sues whom

If your partner harmed you personally, you sue in your own name. If your partner harmed the partnership, the claim may belong to the partnership and the recovery goes to it. The partnership itself may sue a partner for breach of the agreement or of a duty that caused it harm. (Corp. Code, § 16405, subd. (a).)

In an LLC the same split appears, and the duties are framed slightly differently: in a member-managed company members owe the duties of loyalty and care, and in a manager-managed company the managers owe them. (Corp. Code, § 17704.09, subds. (a), (f).) Claims that belong to the company are usually brought as a derivative action. We decide early which claims are direct and which are derivative, because pleading them wrong invites a demurrer.

Three ways this comes up

A two-person consulting partnership splits the profits equally on paper. One partner quietly routes new clients through a separate company he owns. That is a loyalty claim, an accounting, and probably a request for expulsion.

Three partners own a restaurant. Two of them vote to sell the building without telling the third, even though the agreement requires unanimous consent for any sale outside the ordinary course. That is a breach of the agreement, and without an agreement the statute requires the consent of all partners for such an act. (Corp. Code, § 16401, subd. (j).)

A partner stops showing up, stops contributing, and refuses to sign the tax return. The remedy may be judicial expulsion or dissolution rather than damages.

The deadlines

Partnership claims borrow their limitations periods from general law. (Corp. Code, § 16405, subd. (c).) A claim on a written partnership agreement must be filed within four years. (Code Civ. Proc., § 337, subd. (a).) A claim on an oral partnership has two years. (Code Civ. Proc., § 339, subd. 1.) Fraud has three years from discovery of the facts. (Code Civ. Proc., § 338, subd. (d).) Breach of fiduciary duty generally falls under the four-year catch-all period, though courts apply the three-year fraud period when the breach is fraudulent. (Code Civ. Proc., § 343.)

An accounting at dissolution does not revive a claim that is already time-barred. (Corp. Code, § 16405, subd. (c).)

What you can recover

Damages for the breach. Disgorgement of any profit the partner took, which the statute requires the partner to hold as trustee for the partnership. (Corp. Code, § 16404, subd. (b)(1).) An accounting and a judgment for the balance owed. In the right case, an injunction or a receiver.

Two remedies are specific to partnerships. The court can expel a partner who engaged in wrongful conduct that materially harmed the business, willfully or persistently breached the agreement or a fiduciary duty, or made it not reasonably practicable to carry on with that partner. (Corp. Code, § 16601, par. (5).) And the court can dissolve the partnership when a partner's conduct makes it not reasonably practicable to continue, or when continuing in conformity with the agreement is no longer practicable. (Corp. Code, § 16801, par. (5).) See removing a partner or LLC manager.

Before you file

Read the agreement for an arbitration clause, a notice-and-cure provision, and a mediation requirement. Send a records request and a preservation letter. Then send a demand letter that states the claim, the amount, and the deadline. About half of the partner disputes I handle resolve at this stage, usually through a buyout.

Where these cases are heard

Partner lawsuits are filed in the Superior Court for the county where the partnership does business: the Central Justice Center in Santa Ana for Orange County, the Stanley Mosk Courthouse for Los Angeles. Diversity cases go to the Central District of California.

What to bring to the first meeting

The partnership agreement and every amendment. The last three years of tax returns and K-1s. Bank statements for the partnership accounts. The emails and texts that show what your partner did and when you learned of it. And a candid note on what you want: money, your partner out, or you out.

Frequently asked questions

Can I sue my business partner without dissolving the partnership?

Yes. The statute lets a partner sue for damages, an accounting, or enforcement of the agreement without asking for dissolution. (Corp. Code, § 16405, subd. (b).) Dissolution is one remedy among several, and in most cases it is the last one we reach for.

What if we never signed a partnership agreement?

You can still sue. When the agreement is silent or does not exist, the Corporations Code supplies the rules, including equal shares of profits, equal management rights, and fiduciary duties. (Corp. Code, § 16103, subd. (a).) Proving that a partnership existed at all is often the first fight, and emails, tax filings, and conduct decide it.

How long do I have to sue a business partner in California?

Usually four years on a written agreement and two years on an oral one, three years for fraud measured from discovery, and four years for most fiduciary duty claims. (Code Civ. Proc., §§ 337, subd. (a), 338, subd. (d), 339, subd. 1, 343.)

Can I sue my partner for taking a salary?

Depending on the agreement. The default rule is that a partner is not entitled to pay for services, apart from reasonable compensation for winding up. (Corp. Code, § 16401, subd. (h).) If the agreement authorizes a salary, the question becomes whether the amount exceeded what was authorized.

Is suing a business partner expensive?

A contested partner case through trial is a significant investment, and the cost rises with the volume of financial records. Most cases resolve earlier. The agreement may carry a fee clause, and some statutory remedies, like a buyout price action, let the court shift fees against a party who acted in bad faith.

Talk to a California partnership dispute attorney

If you are deciding whether to sue your business partner, call (909) 235-6116 or contact us online. Kolmogorov Law, P.C. is at 327 Magnet, Irvine, CA 92618, and represents partners and LLC members in Orange County, Los Angeles, and throughout California. See also our partnership dispute attorney page and the fiduciary duty guide.

This page provides general information about California law and is not legal advice. Outcomes depend on the partnership agreement, the facts, and the court.