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Locked In A Partnership Over Distributions In Florida? Here Is What You Should Know


A partnership is a profit making entity. Internal disputes between business partners can arise for a wide array of different reasons. Though, a significant portion of partnership disputes are over money. It is not uncommon for partners to get locked in a dispute over distributions. Here, our Florida partnership law attorney highlights the key things you should know if you are locked in a partnership dispute over distributions.

Background: What is a Distribution in a Business Partnership?

 A distribution in a business partnership refers to the allocation of profits, losses, and assets among partners. This process typically follows a predetermined agreement that outlines each partner’s share, based on factors like capital contribution, expertise, and work input. Distributions can occur periodically or upon specific events, and they impact tax liabilities and financial stability for both the partnership and individual partners.

 Review and Understand Your Rights and Duties Under the Partnership Agreement 

The partnership agreement is a legally binding document that outlines the rights and duties of each partner in a business partnership. The document plays a critical role in governing various aspects of the partnership, including as profit distribution. While business partners in Florida do owe each other limited fiduciary responsibilities under state law, it is the mutually bargained-for upon partnership agreement that will largely establish each party’s rights and responsibilities.

Know the Stakes of the Disagreement: Common Reasons for Distribution Disputes 

Partnership disputes over distributions can be a significant source of tension in a business relationship, potentially impacting the overall success of the venture. Common reasons for these disputes often revolve around the following factors:

  1. Dispute Over If Were Made By the Partnership: Disagreements may arise when partners have different interpretations of the partnership’s financial performance. Some partners may believe that the business has generated sufficient profits to warrant a distribution, while others may argue no profit was made at all.
  2. Dispute Over If Distribution Should Be Made: Disputes may also arise concerning the appropriateness or requirement of a distribution. Partners may have differing views on the fairness of a distribution, particularly if it appears to disproportionately favor one partner over another. Additionally, there may be disagreements on whether a distribution is mandatory or discretionary, as defined by the partnership agreement.
  3. Dispute Over Each Party’s Rightful Percentage of Distribution: Finally, business partners in Florida could also end up in a dispute over the specific nature of the distribution. That is to say that a dispute could arise regarding each party’s rightful share of the profit distribution.  

Speak to Our South Florida Partnership Dispute Lawyer Today

At Pike & Lustig, LLP, our partnership law attorneys are driven to help clients find lasting, reliable solutions that are narrowly tailored to meet their needs. If you have questions about a partnership dispute over distributions, we are here to help. Give us a call now or contact us through our website for a fully confidential case review. Our firm provides legal representation throughout South Florida.

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