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Common Causes of Partnership Disputes in Florida

On Behalf of | Oct 9, 2018 | Firm News |


It doesn’t matter how successful your company is, it is pretty much inevitable that a partnership dispute will develop at least once. This can lead to lost business and, if unresolved, it could even lead to the dissolution of the partnership. If you’re in the middle of a partnership dispute, you need to contact a Florida commercial litigation attorney to help you resolve your current conflict before losing additional business or losing your business.

Here’s a look at some of the common reasons partnership disputes arise.

Misappropriation of Partnership Assets 

Misappropriation or misusing business assets for personal use is one of the main topics business partners may have a dispute about. It could just be a simple misunderstanding about whether the other partner would have approved rather than purposeful misuse. An example that could cause a partner dispute would be one partner using a company car to run errands or covering a personal bill out of company funds.

Breach of Fiduciary Duty

Partners have a fiduciary duty to act in the best interest of the business, and that means putting the business first over their own personal interests. Misappropriating funds would be an example of a breach of fiduciary duty, but this can also encompass anything that could harm the interests of the business. A partner cannot divert company opportunities to benefit him- or herself.

Vague Authority

Not properly delineating authority could be another reason you are embroiled in a partnership dispute. When there are not clearly established roles for each person, things can get muddy and boundaries may be breached, or things get left undone. This means no one is accepting responsibility for things going awry, either.

Failure to Fairly Divide Work

Some partnerships have partners that are silent partners. This means they contribute financially, but do not participate in day-to-day operations. Work needs to be divided up, and if some partners feel the workload is not evenly distributed, it can create a conflict that needs to be addressed.

Allocation of Partnership Resources

Disputes can also occur when there is a disagreement on how partnership resources should be allocated. One partner may want to move to a bigger office or exhibit at an expensive trade show out of the state, or even the country. It’s important to have dispute resolution mechanisms in place to help a small disagreement from turning into a major dispute.

Retaining a West Palm Beach Business Litigation Attorney

Having a partnership agreement can help resolve a number of disputes before they escalate out of proportion. Partnership agreements spell out many of the issues that would lead to the aforementioned types of disputes.

If you are creating a new partnership or are currently struggling to manage a current dispute, you need to speak to a skilled Florida business law attorney. The team at Pincus & Currie, LLP in West Palm Beach specialize in handling business disputes and commercial litigation matters. If a dispute arises, you can rest assured our attorneys will be available to help you strategize and decide whether proceeding with litigation is a wise business decision. Contact our office at 561-868-1340 to schedule a consultation.