What is the best action to take when dealing with a Business Partner Dispute?

Female partners have disagreement over document at meeting

Starting a business with someone is an exciting endeavor. However, in business, as in life, sometimes things take an unexpected turn. One or more of the partners may wish to dissolve the partnership after a period of time.

It is recommended that partners have a written agreement in order to avoid stressful, expensive disputes in the event of a dissolution. If there is no such agreement, the next step will depend on the structure of the business the level of revenue generated, and the ultimate desires of the partners disputing what the future of the business should be.

If the business is generating substantial revenue, and one partner wishes to retain his or her ownership interest, his or her best course of action may be to first negotiate a buyout of the other partner(s). If the negotiation is unsuccessful, the partner who wishes to retain his or her interest may want to consider seeking direct action against the other partner(s) so that the court can order the partner(s) out. 

If the business is not generating substantial revenue, or the desired course of action is to close the business, a partner should first seek to get the remaining partner(s) to agree to dissolve the partnership. If the remaining partner(s) do not agree, then seeking the dissolution of the company in court is the proper course of action. 

The Florida Business Corporation Act (FCBA)

Florida Statutes Chapter 607 contains the Florida Business Corporation Act (FCBA). The Act applies to Florida domestic and foreign qualified corporations and should be understood by a corporations’ lawyers, directors, officers, and shareholders. Under the Act, a court, in its discretion, may order the purchase of the petitioning partner’s shares or make any order or grant any equitable relief other than dissolution that the court may deem appropriate.

Changes to the FCBA

The FCBA experienced its first major revision since 1989 in June 2019. The changes, found in House Bill 1009, are effective January 2020. Two new sections were added, authorizing partners to seek additional alternative remedies to judicial dissolution proceedings. 

First, the court may appoint a receiver or custodian during the proceeding. Second, the court may appoint a provisional director when the directors are deadlocked in the management of the corporate affairs and the shareholders are unable to break the deadlock. Alternative remedies may also be ordered at the court’s discretion, upon a showing of sufficient merit to warrant such remedy.

EPGD Business Law is located in beautiful Coral Gables, West Palm Beach and historic Washington D.C. Call us at (786) 837-6787, or contact us through the website to schedule a consultation.

*Disclaimer: this blog post is not intended to be legal advice. We highly recommend speaking to an attorney if you have any legal concerns. Contacting us through our website does not establish an attorney-client relationship.*

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Eric Gros-Dubois

Eric P. Gros-Dubois founded EPGD Business Law in 2013 and is the current head of the firm’s corporate, estate planning, and tax practice, and manages the firm’s Washington D.C. office. With a JD and MBA, and a specialization in finance, Eric is able to step back and view the legal world through a commercial lens while also acting as a trusted business advisor for his clients. He does his best to be solutions oriented, and tries to think like a business owner, not just a lawyer.


*The following comments are not intended to be treated as legal advice. The answer to your question is limited to the basic facts presented. Additional details may heavily alter our assessment and change the answer provided. For a more thorough review of your question please contact our office for a consultation.

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