You Found Out After the Fact
It rarely starts with something dramatic. A lease renewal you first heard about from the landlord. A hire you met on their first day. A new bank account, a line of credit, a vendor contract, an equipment purchase, each one signed by your partner and presented to you as finished. You are an owner of this company, and you are learning about its commitments the way a stranger would.
Two questions decide what happens next, and they are different questions. First, is the company legally stuck with what your partner signed? Second, how do you stop the next one? People tend to fight about the first and neglect the second, which is backwards, because the first is usually settled by rules you cannot change and the second is almost entirely within your control. This page takes them in order.
Can They Legally Do That?
Start with how your LLC is managed, because the answer forks there; if you are not sure which structure you have, your articles and operating agreement say, and our member-managed versus manager-managed guide explains the difference.
In a member-managed LLC, Florida’s default, each member is an agent of the company. An act your partner takes for apparently carrying on the company’s ordinary business, signing a contract, ordering inventory, renewing the lease of a company that leases space, binds the LLC unless they lacked authority in that matter and the person they were dealing with knew or had notice of it. Read that carefully, because the protection runs to the innocent outsider, not to you. The landlord who had no reason to doubt your partner’s authority keeps the lease.
Internally, the rules are stricter than most owners realize. Florida requires the consent of a majority in interest of the members for company action, and your operating agreement may require your signature for exactly this kind of decision. So your partner may well have broken the internal rules while still binding the company externally. That gap between the inside rule and the outside rule is where these disputes live. The company is stuck with the deal, and your remedy runs against your partner, not against the world.
In a manager-managed LLC, the lines move. A member is not an agent of the company merely by being a member, so if your partner is not a manager, their signature does not carry the company’s ordinary-course authority at all. If your partner is the manager and you are not, they hold the day-to-day wheel legitimately, but the biggest moves still belong to the members, and everything they do sits under fiduciary duties, which is where the next sections go. The operating agreement can restrict anyone’s authority internally; the recurring lesson of this page is that internal restrictions alone do not always reach the outsider who never saw them.
What Does Not Count as Ordinary Course
The agency power that protects outsiders has a boundary, and the boundary is the ordinary course of the company’s business. An act that is not apparently ordinary course binds the company only if it was authorized by the appropriate vote of the members. Selling the company’s building, borrowing far outside the company’s pattern, disposing of the assets the business runs on, transforming what the company does, these are not decisions the law lets one member of a member-managed LLC make alone, whatever the outsider believed.
What counts as ordinary depends on the company. A used-equipment dealer selling a forklift is ordinary course; a machine shop selling the lathe it machines with is not. And some decisions sit outside any member’s solo power by statute. Amending the operating agreement or the articles takes the consent of all members, and a well-drafted agreement adds its own list, insider transactions, new debt, new members, compensation changes, that require more than a bare majority. If your partner’s unilateral act sits on this side of the line, the deal itself may be vulnerable, not only the partner who signed it, and that changes the conversation with the counterparty considerably.
How to Stop It
The stoppers come in layers, cheapest first, and most situations need two or three of them rather than all five.
Object in writing. A short, factual letter or email saying the decision was made without the required consent, that you object, and that you expect matters of this kind to come to a vote. No drama. This costs nothing, creates the record every later step relies on, and ends the argument that you silently went along.
Give notice to the counterparties who matter. Apparent authority dies with notice. A letter to the bank requiring two signatures on the operating account, and to the handful of counterparties who matter most, telling them that contracts of a defined kind require both members’ signatures, defeats the innocent-outsider protection with the parties who receive it. The bank letter alone stops more mischief than any lawsuit, because most damage flows through the operating account.
Lock the real estate. Florida lets a company record a certified statement of authority limiting who may sign instruments affecting its real property, and the recorded limitation is deemed known to everyone. Without it, a single member of a member-managed LLC can generally deliver a deed or mortgage that holds up in favor of a buyer or lender who paid value without knowledge. If the company’s building is its major asset, this recording belongs near the top of the list.
Demand the records. A member’s inspection rights reach the books, and a court can order them opened at the company’s expense if you are stonewalled. What the records show usually determines whether you are dealing with a governance problem or something worse.
Ask a court to freeze what is moving. When money or assets are actively leaving, injunctive relief exists to stop specific transactions, and in a dissolution proceeding the court can go further, issuing injunctions and appointing a receiver or custodian to preserve the company. This is the expensive layer, used when the cheaper ones have failed or the facts will not wait.
The durable fix is structural, an operating agreement that assigns authority deliberately, or a conversion to manager-management so authority sits where everyone thinks it does. Both need votes you may or may not have, which is why the layered stoppers above exist.
Found out about another decision after the fact?
The right letter this week beats the right lawsuit next year. Book a free 30-minute consult and we will pick the stoppers your facts need.
Book your free consultWhen Unilateral Acts Become Breach or Worse
Freelancing on governance is one problem; using the freelancing to serve themselves is another. Members who manage a Florida LLC owe the company duties of loyalty and care, which means accounting for profits taken from company business, refraining from dealing with the company on both sides of a transaction, and refraining from taking company opportunities or competing with the company while it is alive. A partner whose unilateral decisions consistently route benefit to themselves, the lease with their cousin’s building, the contract with their own side company, the raise nobody approved, has moved from governance breach into fiduciary breach, and Florida law polices self-dealing transactions with specific fairness rules.
Then comes the question courts ask before any of the merits. Whose claim is it? Harm to the company, money drained, opportunities diverted, belongs to the company, and generally must be pursued on its behalf in a derivative action, while duties owed directly to you support suit in your own name. Choosing the wrong lane is one of the most common ways these cases die on motions, and the claims, sequencing, and settlement realities are mapped in suing a business partner. Where what actually happened is that money left the company for your partner’s pocket, the civil theft playbook, treble damages behind a 30-day demand letter, lives on the partner stole money page. And a partner whose conduct is willful and persistent enough can face judicial expulsion, the courthouse door covered in removing a business partner.
The Paper Trail That Wins These Cases
These disputes are decided by files, not by who sounds angrier. The winning file is built from things you can start today. Every unilateral decision gets a contemporaneous written objection, factual and calm, asking for the vote the rules require. Every records request goes in writing, with dates. The messages where business was actually conducted, texts, emails, the group chat, get preserved from your own accounts and devices. Bank statements and card statements you lawfully receive get saved somewhere your partner does not control. A simple running log, what you learned, when, and from whom, turns a blur of grievances into a timeline a lawyer can use.
Just as important is what stays out of the file. Do not log into your partner’s personal email, clone their phone, or record calls without consent; self-help evidence can violate state and federal law and convert you from the wronged owner into the defendant. Do not retaliate with your own unilateral moves, and do not stop objecting because objecting feels useless. Silence is the one entry the other side’s lawyer wants in your file, because a year of unprotested decisions reads like agreement.
When to Call
A single overstep, objected to and corrected, is partnership friction; not every version of this problem needs a lawyer. Call when there is a pattern that objections have not slowed, when a decision outside the ordinary course is about to close, and above all when money is in motion, accounts draining, assets retitling, customers rerouting, because that is the version where waiting costs the most and the practical clock runs faster than any legal deadline.
The engagements scale to the problem. The letter-and-records stage is a modest flat-quoted engagement that resolves a meaningful share of these situations by itself. Structural repairs to the operating agreement are flat-fee. Litigation is quoted at the consult with a candid read on whether the fight is worth it, and many of these matters end not in a courtroom but in a buyout, priced by the file you built. If the relationship is past saving, the endgame options run from a negotiated split to dissolving the LLC, and the 50/50 version of that fight has its own page. The opposite problem, a partner who disappeared and left you making every decision alone, is covered in when a partner abandons the business. The 30-minute consult is free, and the full landscape of these fights lives on our partner disputes hub.
Frequently Asked Questions
Can My Business Partner Sign a Contract Without My Approval?
In a member-managed Florida LLC, often yes, as far as the outside world is concerned. Each member is an agent of the company, and a contract signed for apparently carrying on the company’s ordinary business binds the LLC unless the other party knew or had notice that your partner lacked authority. Internally, the rules are different. Most company action requires a majority in interest of the members, and your operating agreement may require your consent expressly. So the same signature can be a valid contract and a breach of your deal at the same time, which is exactly why the fix involves notice to outsiders, not only arguments inside the company.
Can My Business Partner Spend Company Money Without Asking Me?
Ordinary-course spending, payroll, supplies, rent, the routine bills of the business your company runs, generally can be handled by either member in a member-managed LLC. Spending that serves the partner rather than the company is different. Unapproved compensation, personal expenses on company cards, and payments to a partner’s own side business are not governance disagreements; they are potential fiduciary breaches, and where money was genuinely taken, Florida’s civil theft framework with its treble-damages exposure can apply. The records demand is how suspicion becomes numbers, and the numbers decide which category you are in.
Is the Company Stuck With a Deal I Never Approved?
Two things decide it, whether the deal was within the apparent ordinary course of the company’s business, and what the other party knew. An ordinary-course deal with an innocent outsider usually binds the company, and your remedy runs against your partner, not the landlord or vendor. A deal outside the ordinary course, selling major assets, unusual borrowing, remaking the business, binds the company only if properly authorized by the members. And any deal where the outsider knew or had notice that your partner lacked authority is vulnerable. This sorting is fact-heavy, and it is the first thing we work out at a consult.
How Do I Take Away My Partner’s Signing Authority?
In layers, because no single move does it all. The operating agreement can restrict authority internally, though amending it takes the consent the agreement requires, unanimity by default. Direct written notice to the counterparties who matter, the bank, the landlord, the key vendors, defeats apparent authority with those specific parties, and a two-signature rule at the bank is often the single most effective practical stopper. For real estate, Florida lets the company record a certified statement of authority limiting who can sign deeds and mortgages, and the recorded version is deemed known to everyone. Converting to a manager-managed structure is the durable fix, where the votes exist to adopt it.
My Partner Moved Company Money to a New Account. What Now?
Treat it as urgent and document before you confront. Preserve the statements and records you can lawfully access, send the records demand, and get advice the same week, because money in motion is the fact pattern where waiting costs the most. Moving company funds to an account you cannot see may have an innocent explanation, and it may be the first step of a freeze-out or worse. A court can enter orders that stop specific transactions, and where the facts show genuine taking rather than a dispute, the civil theft playbook with its 30-day demand letter comes into play. The sequencing matters, and it is covered at the consult.
Should I Confront My Partner or Stay Quiet?
Object, in writing, calmly, and soon, but do not stage the angry confrontation before you have preserved the record. Silence reads as consent, and a long pattern of unprotested unilateral acts weakens both your internal position and, eventually, your leverage. The middle path wins, a factual written objection that asks for the vote the rules require, sent while you quietly preserve documents and take advice on the next step. What you should not do is retaliate in kind, raid accounts, or grab evidence unlawfully, because self-help is how the partner with the good case becomes the defendant.
What if We Are 50/50 and They Keep Doing It Anyway?
The 50/50 version is its own problem, because neither of you holds the majority that ordinary company action requires, so in a real sense every significant unilateral act skips a vote your partner could not have won. That strengthens your objections and your claims, and it also means the endgame usually is not coexistence; it is a priced separation. The pressure levers, the court doors that work without a majority, and the buyout election that shapes the endgame are collected on our page about getting rid of a 50/50 business partner.
When Will a Court Actually Stop a Partner?
Courts intervene when there is a concrete wrong and a reason damages later will not fix it, such as company money flowing to insiders, assets being transferred away, or a deal outside the ordinary course being signed without authority. In a dissolution proceeding, Florida courts can issue injunctions and appoint a receiver or custodian to preserve the company while the case is heard. Outside that setting, targeted injunctive relief is available on the right facts, and its realistic role is usually to freeze a specific transaction while the leverage, records, claims, and the eventual buyout, does the rest of the work.
Common Situations
The lease from the landlord. A member learns his 50/50 partner renewed the office lease for five years at a higher rate, alone. The lease is ordinary course and the landlord had no notice, so the company is bound. The response is layered, a written objection, a two-signature letter to the bank, and a records demand that surfaces two more surprises. The pattern stops, and the operating agreement gets the consent-rights section it never had.
The building that almost sold. A partner in a property-holding LLC lists the company’s warehouse and signs a contract with a buyer, without a word to her co-owner. Selling the company’s main asset is outside the ordinary course, the members never authorized it, and a recorded statement of authority, filed after an earlier scare, limited deed-signing to both members together. The closing never happens, and the buyer’s deposit dispute lands on the partner who signed, not the company.
The vendor that was family. A managing partner steers the company’s maintenance work to his brother-in-law’s firm at rates nobody benchmarked, one unilateral decision at a time. The records demand prices the pattern, the fairness rules for insider transactions frame the claim, and the derivative case settles with the contract terminated and a buyout of the manager’s interest, net of what the books showed the arrangement cost.
Sources of Law
- Florida Revised Limited Liability Company Act, ch. 605: §605.04074 (agency: ordinary-course acts of a member bind a member-managed company unless the outsider knew or had notice of the lack of authority; outside-ordinary-course acts bind only if authorized by appropriate vote; real-property instruments conclusive in favor of value-givers without knowledge unless a recorded certified statement of authority limits authority), §605.04073 (voting: majority-in-interest consent for company action in a member-managed LLC; unanimous consent to amend the operating agreement or articles), §§605.0301 to 605.0303 (power to bind; statements of authority, including that a recorded certified copy limiting real-property authority is deemed known to all; statements of denial), §605.04091 (duties of loyalty and care), §605.04092 (conflict-of-interest transactions and the fairness framework), §§605.0410 to 605.0411 (records rights; court-ordered inspection at the company’s expense), §605.0703(3) (injunctions, receivers, and custodians in judicial dissolution proceedings), §§605.0801 to 605.0803 (direct and derivative actions). Retrieved 2026-08-09.
- Dinuro Investments, LLC v. Camacho, 141 So. 3d 731 (Fla. 3d DCA 2014): the direct-versus-derivative framework for Florida LLC member claims.
- Fla. Stat. §772.11 (civil remedies for theft: threefold damages, attorney’s fees, 30-day written demand requirement).
Updated on August 9, 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.