Partner Rights

What are partner rights?

Partner rights refer to the legal entitlements and obligations individuals or entities have in a partnership agreement. A partnership is a business relationship between two or more people or entities where they agree to share the profits and losses of the business. In a partnership, each partner has certain rights and responsibilities outlined in the partnership agreement.

Some common partner rights include:

Management and control: Partners have the right to participate in the management and control of the business, including making important decisions, signing contracts, and hiring employees.
Profit and loss sharing: Partners have the right to share in the profits and losses of the business according to the terms outlined in the partnership agreement.
Access to information: Partners have the right to access the financial and other important information related to the business.
Dissolution and termination: Partners have the right to dissolve or terminate the agreement, subject to the terms outlined in the partnership agreement.
Transfer of ownership: Partners have the right to transfer their ownership interest in the business, subject to the terms outlined in the partnership agreement.

Need help with a matter related to partner rights? Schedule your consultation today with a top shareholder disputes and derivative litigation attorney.

In Florida, which laws and regulations apply to partner rights?

In Florida, partnerships follow the Florida Revised Uniform Partnership Act (FRUPA). FRUPA sets out the default rules for partnerships without a partnership agreement, the requirements for creating a partnership and the rights and obligations of partners. Some of the critical provisions of FRUPA that relate to partner rights include:

Management and control: Under FRUPA ( Stat. § 620.1406), unless the partners have agreed otherwise, each partner has equal rights in the management and control of the partnership. Decisions are made by a majority vote, with each partner having one vote.
Profit and loss sharing: Fla. Stat. § 620.1503 states that partners are entitled to share in the profits and losses of the partnership according to the partnership agreement. If the partnership agreement does not specify the allocation of profits and losses, they are split equally among the partners.
Access to information: Under Stat. § 620.1407 and Fla. Stat. § 620.1304, each partner has the right to access and inspect all partnership records and documents.
Dissolution and termination: A partnership may dissolve in several ways, including by mutual consent of the partners, the withdrawal of a partner, or the occurrence of certain events specified in the partnership agreement.
Transfer of ownership: Unless the partnership agreement provides otherwise, according to Stat. § 620.1701, a partner may not transfer their interest in the partnership without the other partners’ consent.

What are common issues regarding partner rights that lead to litigation?

Litigation in Florida over partner rights can arise from a variety of issues, but some of the most common include:

Breach of partnership agreement: A partnership agreement sets out the rights and obligations of the partners, and if one partner breaches the agreement, it can lead to litigation. For example, if a partner fails to contribute the required capital to the partnership or takes actions not permitted under the partnership agreement, such as making decisions without consulting other partners.
Disagreements over management and control: Partners may disagree on management practices or who should make critical decisions. These disagreements can lead to litigation if one partner believes their rights to participate in management and decision-making are unfairly restricted or denied.
Allegations of self-dealing or mismanagement: Partners must act in the best interests of the partnership, and if one partner faces allegations of acting in their self-interest or engaging in mismanagement, they will likely face litigation. Self-interested dealings could include allegations of fraud, embezzlement, or other forms of financial misconduct.
Disagreements over profit sharing: Partners may disagree on allocating profits among themselves. If one partner feels they are not receiving a fair share of the profits, they may pursue litigation.
Disputes over dissolution or termination: Partners may disagree on how to dissolve or terminate the partnership, particularly if significant assets or liabilities are involved. Disagreements can arise over the valuation of the partnership, the distribution of assets, and the allocation of liabilities, among other issues.

When a set of facts is appropriate to meet the requirements giving rise to problems with partner rights, there are many paths a claimant may take. We are value-based attorneys at Jimerson Birr, which means we look at each action with our clients from the point of view of costs and benefits while reducing liability. Then, based on our client’s objectives, we chart a path to seek appropriate remedies.

To determine whether your unique situation may necessitate litigation, please contact our office to set up your initial consultation.

Frequently Asked Questions

Can partner rights be modified?

Partner rights are modifiable by mutual agreement of the partners, but the modification must comply with the partnership agreement and applicable law. In some cases, changes may require the unanimous consent of all partners.

How can I protect my rights in a partnership?

It’s essential to clearly understand your rights and obligations under the partnership agreement and applicable law. It’s also a good idea to document all partnership decisions and agreements and seek legal advice if disputes arise. In either case, engaging with legal counsel well-versed in shareholder disputes will ensure a strategic, legally-compliant approach to these issues.

Have more questions about an appraisal rights-related situation?

Crucially, this overview of partner rights does not begin to cover all the laws implicated by this issue or the factors that may compel the application of such laws. Every case is unique, and the laws can produce different outcomes depending on the individual circumstances.

Jimerson Birr attorneys guide our clients to help make informed decisions while ensuring their rights are respected and protected. Our lawyers are highly trained and experienced in the nuances of the law, so they can accurately interpret statutes and case law and holistically prepare individuals or companies for their legal endeavors. Through this intense personal investment and advocacy, our lawyers will help resolve the issue’s complicated legal problems efficiently and effectively.

Having a Jimerson Birr attorney on your side means securing a team of seasoned, multi-dimensional, cross-functional legal professionals. Whether it is a transaction, an operational issue, a regulatory challenge, or a contested legal predicament that may require court intervention, we remain a tireless advocate every step of the way. Being a value-added law firm means putting the client at the forefront of everything we do. We use our experience to help our clients navigate even the most complex problems and come out the other side triumphant.

If you want to understand your case, the merits of your claim or defense, potential monetary awards, or the amount of exposure you face, you should speak with a qualified Jimerson Birr lawyer. Our experienced team of attorneys is here to help. Call Jimerson Birr at (904) 389-0050 or use the contact form to schedule a consultation.