Partnership Disputes In Florida: Who Is Responsible For The Debts Of The Business?
Building, owning, operating, and growing a successful business is complicated. A partnership can be an effective, efficient business entity for many different purposes. If your partnership is incurring debt—or it has financial obligations—it is imperative that you understand your personal liability, or lack thereof. In this article, our Miami partnership dispute lawyers explain how you determine who is responsible for the debts/financial obligations of the business and what you should do if you are involved in a dispute.
The Structure of the Partnership Matters
The Cornell Legal Information Institute defines a partnership simply as a “for-profit business organization comprised of two or more persons.” That being said, not all business partnerships are created equal. In fact, in Florida, there are actually four different types of partnership entities. You can form any of the following types of business partnerships:
- General Partnership;
- Limited Partnership (LP);
- Florida Limited Liability Partnership (LLP); and
- Limited Liability Limited Partnership (LLLP).
The personal legal protection offered by a partnership varies. Notably, a general partnership offers no guaranteed liability protection against debts incurred by the business. If you are a general partner in Florida, you are assumed to be responsible for the debts of the business. However, other types of partnerships (LPs, LLPs, and LLLPs) can offer some additional protection.
Tip: Liability protection is an important consideration when forming a business. If you are forming a partnership, it is imperative that you put the right structure in place.
The Partnership Agreement Matters
You should always have a written partnership agreement in place. In Florida, the partnership agreement forms much of the basis of your rights and responsibilities. A well-crafted partnership agreement can dramatically reduce the risk that business partners will end up in a destructive dispute. Further, a partnership agreement can clarify certain financial interests and financial responsibilities—including determining which partner(s) is responsible for certain debts/liabilities.
A Dispute Over Partnership Debt Should Be Addressed Proactively
A dispute over partnership debt can cause damage to your business interests and your personal finances. If you are locked in a disagreement over a partnership debt—whether you are dealing with an outside creditor or you are involved in a dispute with your own business partner—it is essential that you take immediate action to protect your best interests. An experienced South Florida partnership law attorney can help you understand your rights, understand your options, and develop a strategy focused on finding the best solution.
Get Help From Our Partnership Dispute Lawyers for Immediate Help With Your Case
At Pike & Lustig, LLP, our Florida partnership attorneys have the legal skills and professional experience that you can trust for high level representation. If you have any questions about business debts and partnership disputes, we are here to help. Call us now for a confidential review and assessment of your case. Our attorneys provide business law services throughout South Florida, including in Miami, West Palm Beach, Boca Raton, Coral Gables, Fort Lauderdale, and Hialeah.