Florida Business Partner Disputes and Business Divorce

The Six Fights That End Florida Partnerships

Nearly every business divorce we see is a version of one of these six fights. Knowing which one you are in tells you which tools Florida law hands you, and which ones it does not.

• The freeze-out. You are still an owner on paper, but the distributions stopped, your login died, and decisions happen without you. The company keeps earning; you stopped being paid.
• Self-dealing. A partner pays themselves a swollen salary, hires their spouse, signs contracts with their own side company, or diverts the most valuable customers to a new entity down the street.
• Stolen money. Not aggressive accounting, theft. Money moved to personal accounts, inventory walking out the door, company cards funding a lifestyle. Florida’s civil theft law can put up to three times the loss on the table, the recovery steps live in our partner stole money guide, and suing a partner has its own playbook.
• A partner who checked out. They took a job, stopped answering, and left you paying the bills on debts you both guaranteed. Our guide to a partner who abandoned the business covers recovering their share of what you pay and the breach claims that follow.
• Unilateral moves. You learn after the fact about a signed lease, a hire, or a bank transfer. See when a partner can act without you, and what stops it.
• Deadlock. Two owners, 50/50, no tie-breaker. Nothing can be signed, nothing can be decided, and the business suffocates while both sides wait for the other to blink.
• The trapped minority owner. You own 20 or 30 percent of a company that pays you nothing, tells you nothing, and will not buy you out. Florida gives you fewer default rights here than almost any state, which changes the strategy entirely. See minority owner rights.
• The split itself. Sometimes nobody did anything wrong and the partnership is simply over. Even a clean business divorce has a buyout to price, taxes to plan, and sometimes an LLC to dissolve. Done badly, a clean split turns into one of the other five fights. A partner planning their own exit can start with how to get out of a business partnership.

When a partner dies rather than fights, that is a different problem with its own pages, on what happens to a business when the owner dies, buy-sell agreements, and putting the LLC in a trust.

A Litigator Who Also Writes the Agreements

Most business lawyers live on one side of this line. The drafters produce operating agreements they have never had to defend in front of a judge; the litigators fight over documents they had no hand in writing. Kevin works both sides. He litigates partner disputes in court, part of a broader business litigation practice, and he writes and repairs the operating agreements, buy-sell agreements, and deal structures those fights are decided by. He began his career as a Miami-Dade prosecutor, trying cases before he ever papered a deal. That matters because in a partner dispute the outcome usually turns on a handful of clauses, the ones a pure drafter never thinks to stress-test, and on evidence that starts disappearing the day the fight begins.

Florida Gives Minority Owners Almost No Default Protection

One hard truth shapes every one of these cases. Most states give a mistreated minority owner an escape hatch. Prove the majority is oppressing you, and a court can force them to buy you out. Florida’s LLC law never even uses the word oppression. A Florida court can step in when those in control act illegally or fraudulently, when company assets are being looted or wasted, or when a true deadlock threatens the business, but there is no rule that being squeezed, outvoted, and ignored entitles you to an exit at a fair price. Whether corporate shareholders fare any better is its own question, answered on our shareholder oppression page.

Quitting does not solve it either. A member who withdraws from a Florida LLC keeps only a bare economic interest, like an outsider holding a right to distributions that may never come, with no statutory right to be bought out. Your capital stays behind, on your former partner’s terms.

What you do have is the right to see the books (and a court can order them opened at the company’s expense if you are stonewalled), the right to sue over concrete fiduciary breaches, and whatever rights your operating agreement gives you. That last item is the whole game. In Florida, the operating agreement is not paperwork; it is nearly all the protection a minority owner gets. If you are signing into a deal now, that is fixable. If you are already in the fight, strategy starts from the paper you have.

Suing Your Partner: Your Claim or the Company’s?

Before any of the merits, Florida courts ask a threshold question. Who was actually harmed, you or the company? If a partner drained company money or diverted company customers, the injury belongs to the company, and you generally must sue on its behalf in a derivative action, usually after a written demand to the other members or managers, who get up to 90 days to act unless the demand would be futile. What you recover in a derivative case flows to the company, not to you personally, though a successful plaintiff can be awarded fees and expenses out of the recovery.

You can sue in your own name when the injury is yours alone, or when your partner violated a duty owed directly to you by contract or statute. The line sounds academic. It is anything but, because choosing the wrong lane is one of the most common ways partner lawsuits get dismissed before the facts are ever heard. The company also has a counterweapon worth knowing about. It can appoint an independent special litigation committee to investigate a derivative suit, pause it, and ask the court to end it.

When actual theft is involved, a separate Florida statute adds real leverage, because proof of theft by clear and convincing evidence can bring up to three times the damages plus attorney’s fees. It requires a specific written demand letter first, with a 30-day window to pay, and it is not a way to dress up an ordinary money dispute, courts reject that. Used on the right facts, it changes settlement conversations completely.

Removing a Partner (or Being Removed)

People assume a majority can simply vote a bad partner out. In Florida, they usually cannot. Unless the operating agreement contains an expulsion mechanism, removing a member takes either unanimous consent of the others, and only in a few narrow situations, or a court order. A judge can expel a member who has engaged in wrongful conduct that seriously harms the business, who willfully and persistently breaches the agreement or their duties, or whose conduct makes it impossible to carry on the business together. That standard is provable, we litigate it, but it demands documentation, not just exasperation. The full walkthrough lives on removing a business partner, and the 50/50 version, where no one has a majority, has its own playbook at getting rid of a 50/50 business partner. For owners outside Florida, the general version is at how to remove a partner from an LLC.

Two traps hide here. First, expulsion ends a member’s vote, not their wallet. The expelled member keeps their economic interest unless a buyout happens, so removal without a priced exit can leave you permanently married to someone you just threw out of the house. Second, if you are the one being pushed out, the same rules protect you. An expulsion done outside the agreement and the statute can be attacked, and your economic rights survive it.

Deadlock, Dissolution, and the Forced Buyout

When nothing else works, Florida lets a member ask the court to dissolve the company, for deadlock that threatens irreparable harm, for illegal or fraudulent conduct by those in control, or for looting and waste. Dissolution is the nuclear option, the company is wound down and its value distributed, and the credible threat of it is often what finally produces a fair settlement.

But filing carries a consequence most people never see coming. Once a member petitions to dissolve, the company or the other members can elect to purchase the petitioner’s entire interest at fair value, and that election is irrevocable. Your dissolution case converts into a valuation case, you cannot simply withdraw it, and at the end you are out of the company at a price a judge sets. Sometimes that forced buyout is exactly the exit a trapped owner wanted; sometimes it hands the other side a way to take you out at a discount moment. If the court finds you had probable grounds to file, it can also make the company pay your attorney’s and experts’ fees. This is chess, not checkers, and the sequence of moves matters as much as the merits.

One more wrinkle arrived in 2020. If the operating agreement contains a deadlock sale provision, a mechanism the members agreed on for breaking a tie, that provision displaces the court’s dissolution power once it is set in motion. Florida now lets your contract outrank the courthouse.

The Agreement That Prevents All of This

Every fight on this page has a clause that would have prevented it, or priced it in advance. A deadlock sale provision that breaks a 50/50 tie without a judge. An expulsion clause with a buyout formula, so removing a partner does not take a lawsuit. A dispute-resolution clause chosen deliberately, since an arbitration clause decides in advance whether these fights happen in a courtroom or a conference room, and that choice cuts differently for a majority owner than a minority one. Put and call rights that give a minority owner a real exit at a real price. Distribution rules (including a tax-distribution clause, so nobody pays tax on profits they never received). The right management structure, member-managed or manager-managed, so authority sits where you think it does, and a silent partner deal that is actually papered. Vesting for a partner who earns in with work instead of money. A buy-sell agreement for death, disability, and divorce.

This is why the litigation side of the practice feeds the planning side. Having fought over these agreements in court, Kevin drafts them to hold up there, for owners forming a company, buying into one, or repairing the paper on a business that has grown past its handshake. If your operating agreement is a template nobody has read since the day of signing, the cheapest moment to fix it is before the fight, through our operating agreement practice.

What It Costs

Dispute work is quoted at the consult, after we understand the facts, because no two partner fights follow the same road. We will tell you plainly what it is likely to cost, the strength of your position, and whether the fight is worth having; sometimes a single firm letter and a records demand resolve what months of shouting could not. The planning side, operating agreements, buy-sell agreements, and deal structuring, is flat-fee and quoted up front. The 30-minute consult is free either way, and you do not need to have it figured out first.

Frequently Asked Questions

Common Situations

The K-1 with no check. A 30 percent member has not seen a distribution in two years, but every spring a K-1 arrives showing profits she owes tax on. The books are closed to her and the majority partner says the company “needs the cash.” A records demand opens the books; what they show becomes a fiduciary case, and the tax-on-phantom-profits squeeze becomes leverage in the buyout talks.

The 50/50 brothers. Two brothers own a contracting company equally, and after a falling-out neither will sign anything, bids are lapsing and the bank is calling. With no deadlock clause, one files for judicial dissolution; the other answers by electing to buy his interest at fair value. The fight becomes a valuation battle over the company’s worth, resolved months later at a mediated number both can live with.

The partner with a side company. A managing partner quietly forms a new LLC and starts routing the most profitable jobs to it, using the old company’s crew and equipment. That is a duty-of-loyalty case brought on the company’s behalf, with the diverted profits owed back, and on the right facts the civil-theft demand letter, with its threat of triple damages, brings a settlement before suit.

Sources of Law

• Florida Revised Limited Liability Company Act, ch. 605: §605.04091 (duties of loyalty and care), §§605.0410 to 605.0411 (records rights; court-ordered inspection at the company’s expense), §§605.0601 to 605.0603 (dissociation, expulsion, and its effect), §605.0702 (grounds for judicial dissolution; deadlock sale provisions, added 2020), §605.0706 (election to purchase instead of dissolution), §§605.0801 to 605.0806 (direct and derivative actions, special litigation committees). Retrieved 2026-08-07.
• Dinuro Investments, LLC v. Camacho, 141 So. 3d 731 (Fla. 3d DCA 2014): the direct-versus-derivative framework for Florida LLC member claims.
• Disorbo v. American Van Lines, Inc., No. 4D21-2994 (Fla. 4th DCA Jan. 4, 2023): a timely election to purchase defeats a dissolution petition; dilution of a member’s percentage can be a direct claim; the business-judgment rule does not shield self-dealing.
• Fla. Stat. §772.11 (civil remedies for theft: threefold damages, attorney’s fees, 30-day written demand requirement). Retrieved 2026-08-07.
• Fla. Stat. §§607.1430, 607.1436 (corporations: judicial dissolution grounds and the election to purchase at fair value; the corporate act’s former express oppression ground was removed in the 2019 revision, and ch. 605 has never had one).

Updated on August 7, 2026. Reviewed by Kevin D. Klagge, Esq., Fla. Bar No. 99502. Attorney Kevin Klagge represents families, businesses, and international clients in estate and tax planning, business structuring, and international law, with a focus on Florida legal tools. He litigates estate and business issues in court. General information about Florida law, not legal advice, and no attorney-client relationship is created. Outcomes depend on the specific facts; past results do not guarantee a similar outcome. Do not send confidential information until we have agreed to represent you.