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Partnership Disputes: Navigating Cases With Partners Who Are Also Employees


Every company needs the right structure in order to succeed. For many different types of businesses, a partnership—whether a general partnership (GP), limited partnership (LP), or limited liability partnership (LLP)—may be the best option. By definition, business partners must put a great deal of faith into each other—especially so when a partner works for the business on a day-to-day basis. Here, our West Palm Beach partnership law lawyer explains the key things to know about navigating a dispute with a partner who also actively works for the company in Florida.

Know the Regulations: Business Partners are Technically Not “Employees” for Tax Purposes

To start, it is important to note that a business partner is not technically an employee of their own partnership, whether it is a GP, an LP, or an LLP. As explained by the Internal Revenue Service (IRS), a partner within his or her own partnership is “considered to be self-employed, not employees, when performing services for the partnership.”

Complications Can Still Arise When a Partner is Heavily Involved in Business Operations 

While business partners are not technically “employees” of their own partnership in the eyes of the IRS and state/federal regulators, there can still be significant implications for the dispute if one or more partners is heavily involved in the day-to-day operations of the business. In some cases, this can actually make partnership disputes more likely, as a business partner who works for the company may have major responsibilities and may even draw something equivalent to a salary.

In these types of situations, It is imperative that business partners navigate a dispute with an eye towards finding a solution that does not undermine the future of the business—at least whenever that is reasonably possible. Although every partnership dispute in Florida involves its own unique set of facts and circumstances, the overriding goal is to maintain the integrity of the business and ensure its long-term success.

Why a Proactive Approach is Important in Business Partnership Disputes

 You do not want to let partnership disputes linger. A proactive approach is vital in business partnership disputes because it helps to not only prevent issues from escalating and causing significant damage to the business, but it can also make a solution far more efficient and cost-effective. By addressing problems early on, partners can work together to find an answer that is beneficial for all parties. Among other things, this can help to maintain the integrity of the partnership and protect the long-term success of the business.

Call Our Southeast Florida Partnership Dispute Attorney for Help

At Pike & Lustig, LLP, we are driven to provide the highest level of personalized legal representation to our clients. If you are locked in a partnership dispute and you or your partner actively works for the business, we are here to help. Give us a phone call now or contact us online for your confidential case review. Our firm services West Palm Beach and communities throughout all of South Florida.



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