Partnership Disputes Over Profit Sharing
Partnership disputes can arise for many different reasons. As you may already suspect, a significant percentage of partnership disputes are focused on money. Business partners share profits in accordance with the specific terms of their partnership agreement. Unfortunately, in some cases, there can be disagreements over who is entitled to receive what. In this article, our West Palm Beach partnership dispute attorneys highlight four tips for resolving disputes over profit sharing.
- Organize All Documents, Financial Records, and Related Information
If you are involved in a partnership dispute over profit sharing, the first thing you need to do is get organized. Gather and prepare all relevant documents, record, and related financial information. It is crucial that you understand the nature and scope of the dispute. Generally speaking, partnership disputes over profit sharing arise for three key reasons:
- A disagreement over what percentage of the split each party should get;
- A disagreement over whether a distribution should be made; or
- A disagreement over what constitutes “profits.”
Regardless of the specific nature of the dispute that you are dealing with, you will want to have as much evidence and information as possible on your side. Once you fully understand the nature and scope of the profit sharing dispute, you will be in the best position to move forward.
- Refer to the Partnership Agreement
The Florida Revised Uniform Partnership Act is our state’s key statute governing business partnerships. On issues like profit sharing, the law generally defers to the agreed upon terms of the parties. In other words, the specific terms included in your partnership agreement will likely determine the result in any legal dispute. Make sure you have a copy of (and understand) any partnership agreement that has been signed.
- Consider All Options for Resolving the Dispute
A partnership disagreement over profit sharing does not necessarily have to become a nasty, fierce dispute that ends up in litigation. If there are profits being made, it generally means that the business is reasonably successful. A long, drawn-out dispute could cause damage to both parties—and the business itself. For this reason, partnership disputes are often good candidates for informal negotiations and business mediation.
- Be Ready to Get Professional Guidance and Support
With partnership disputes, it is always best to take a proactive approach. You do not have to navigate a disagreement over profit distribution on your own. A Florida business law attorney with experience representing business partners involved in legal disputes can review your case, answer questions, and help you find the right path forward.
Are You Locked in a Partnership Dispute in South Florida?
We are here to help. At Pike & Lustig, LLP, our Florida commercial law attorneys have considerable experience representing business partners involved in disputes. If you have questions about profit sharing and partnerships, professional representation is available. Call us now for a completely confidential initial case evaluation. Our law firm represents business partners throughout South Florida, including in West Palm Beach, Jupiter, Boca Raton, Coral Gables, Miami, and Miami Beach.
Resource:
leg.state.fl.us/Statutes/index.cfm?App_mode=Display_Statute&URL=0600-0699/0620/0620PARTIIContentsIndex.html
