Can I Make My Business Partner Invest More in the Partnership in Florida?

A successful business partnership will generally require a significant investment of resources—time, money, etc—on the part of the business partners. You may be wondering: What options are available if my partner is not investing enough into our business? In Florida, the answer depends primarily on the terms of your partnership agreement. Here, our Miami partnership dispute lawyer explains the key things to know about your ability to force your business partner to invest more into the partnership in Florida.

 State Law: Partners Only Owe A Duty of Loyalty and Duty of Care 

In regards to requiring a partner to make a greater investment in a business, Florida law provides very limited options. Under Florida Statutes § 620.8404, the only fiduciaries duties that business partners owe each other are both a duty of loyalty and a duty of care. They lack full fiduciary obligations to each other. In general, it would be challenging—though not impossible—to prove that a lack of investment constitutes a breach of duty of loyalty or duty of care.

 Financial Obligations are Largely Based On the Terms of the Partnership Agreement 

When considering financial obligations, it’s important to realize that they are primarily governed by the terms set in the partnership agreement. A well-drafted partnership agreement is crucial for outlining the financial contributions and responsibilities of each partner. In the vast majority of cases, a well-drafted partnership agreement will specify how much capital each partner is expected to contribute. It should also speak to circumstances in which additional contributions may be required. If a partner is not meeting the financial obligations as per the agreement, the other partner(s) can seek legal recourse based on breach of contract.

 The Best Approach Depends on the Specific Circumstances 

Partnership disputes are case-by-case issues. A one-size-fits-all approach is not good enough. If you find yourself in a situation where you believe your business partner should invest more in the partnership, it is important to consider the specific circumstances.

To start, review the partnership agreement to understand what it says about financial contributions. If the agreement provides a pathway for additional investments, it may be wise to have an open and honest conversation with your partner about the financial needs of the business.

When possible, it is best to resolve business partnership disputes in a low-conflict manner. Still, there are situations in which legal action may be required. A Florida partnership dispute lawyer can help you navigate a complex case.

 Set Up a Fully Private Case Review With a Florida Partnership Lawyer

At Pike & Lustig, LLP, our devoted partnership attorney in Florida has the legal and professional expertise that you can trust in complex cases. If you have any questions about your options to get your business partner to invest more into the company, our team has the experience to help you determine the best path forward. Contact us today for a fully confidential. Our firm takes on partnership disputes throughout South Florida.

Source:

leg.state.fl.us/Statutes/index.cfm?App_mode=Display_Statute&Search_String=&URL=0600-0699/0620/Sections/0620.8404.html