Partnership Disputes in Florida: Can One Partner Force Out Another?
As defined by Investopedia, a partnership is a formal arrangement whereby two or more people manage and operate a business together. In practice, a partnership is only as effective as the relationship between the parties. When a dispute arises among close business partners, there can be serious problems.
You may be wondering: Is it possible for one partner to force the other out of the business? The short answer is ‘yes’—at least in some cases. Though, there are many different factors that must be considered. Here, our West Palm Beach shareholder & partnership dispute lawyers explain the key things to know about forcing a partner out of a business.
The Partnership Agreement is the Basis of Your Rights
As a starting point, you should always look to a written partnership agreement. If there is one in place, it forms much of the basis of your legal rights and legal responsibilities. A partnership agreement may contain certain protocols/procedures for determining if and when one partner can force the other out of the business. Check the partnership agreement or shareholder agreement for the following types of provisions:
- The legal responsibilities of each business partner;
- The legal powers of each business partner;
- Protocols for handling the transfer of ownership; and
- Protocols for handling disputes between the partners.
Whether or not a partner ultimately has the legal authority to force another person out of the business depends on so many different factors, including each party’s ownership stake in the company and their powers under the partnership agreement. Generally speaking, a 50-50 partner cannot force another member out of the business without a written agreement to the contrary.
How Florida Courts Resolve Partnership Disputes
With partnership disputes, it is almost always best for the parties to try to find a collaborative solution. A lengthy dispute can cause irreparable damage to the business. In the end, it could result in both business partners losing out. For this reason, partnership disputes are often well-suited for alternative dispute resolution, such as business mediation or business arbitration. A settlement may be better for both parties.
At the same time, you must protect your legal rights and your personal business interests. It may be necessary to bring a partnership dispute to court. In Florida, a court will resolve partnership disputes by looking to the written operating agreement and the state’s Revised Uniform Partnership Act. Depending on the circumstances, a court may order the dissolution of the partnership as a legal remedy.
Call Our West Palm Beach Partnership Law Attorneys for Immediate Legal Help
At Pike & Lustig, LLP, our Florida partnership lawyers are skilled, effective advocates for our clients. If you are involved in a dispute and you have questions about forcing a partner out of a business, we are available to help. Call us today to set up a fully confidential review of your partnership case. We represent clients throughout the whole of South Florida, including in Palm Beach Gardens, Lake Worth, Riviera Beach, Delray Beach, Wellington, and Palm Beach Gardens.