When Will A Florida Court Approve An Accounting In A Partnership Dispute?
Are locked in a dispute with a business partner in Florida? Is the dispute centered around important financial issues? If so, a legal option called an “accounting” may be the most effective and efficient way to resolve the matter. It is crucial that you understand how a partnership accounting works and when a Florida court will allow one to go forward. In this article, our West Palm Beach partnership dispute attorney highlights the key things that a petitioner needs to prove to get an accounting in a partnership dispute in Florida.
What is an Accounting in a Partnership Dispute in Florida?
At the most fundamental level, an accounting in a partnership dispute is a court-supervised process whereby a Florida court will review and evaluate all of the financial transactions of the business. Using the most widely-accepted standards of accounting, the court will then determine the financial rights and responsibilities of each business partner. Put another way, the Florida court will determine:
- What each partner owes to the partnership; and
- What each partner owns within the partnership.
Notably, during the accounting process, Florida courts have the legal authority to reclassify transactions and/or to adjust accounts in order to reach a fair and equitable outcome.
The Standard for Court Approval of a Partnership Accounting
A Florida court will not automatically approve a petition for an accounting in a partnership dispute. Instead, the first step in the process of getting an accounting is proving the entitlement to an accounting. That being said, Florida courts generally give parties wide latitude to obtain an accounting. To get an accounting for a partnership dispute, a petitioner must prove:
- That they were actually in a valid legal business partnership with the other parties; and
- That there is a genuine financial dispute for which an accounting is an appropriate remedy.
To be clear, accounting for a partnership dispute is not always an adversarial process. It can be an efficient and cost effective way to resolve a financial dispute arising out of a business partnership. Partners can jointly file a petition for an accounting.
You Do Not Have to Request an Accounting to Take Legal Action
A partnership account is an option. It is not a requirement. Under Florida law (Florida Statute § 620.8405), a business partner has the legal right to take action for the breach of a partnership agreement or a violation of a duty of loyalty regardless of whether or not he or she has previously petitioned for an accounting.
Call Our West Palm Beach, FL Partnership Law Dispute Attorney Today
At Pike & Lustig, LLP, we advocate for the rights and interests of our clients. If you have any questions about the standard that a Florida court will use to review in a petition for an accounting in a partnership dispute, we are here to help. Give us a call now or connect with us directly online to arrange your strictly private initial appointment. From our West Palm Beach office, our Miami office, and our Wellington office, our attorneys represent clients throughout Southeastern Florida.