Partnership or Shareholder Derivative Action Disputes

2. Florida Legal Context

Florida law provides specific rules for partner and shareholder disputes:

• Partnerships & LLCs
  • Governed by the Florida Revised Uniform Partnership Act (Ch. 620, Fla. Stat.) and the Florida Revised LLC Act (Ch. 605, Fla. Stat.).
  • Operating agreements and partnership agreements often dictate dispute resolution and buyout procedures.
• Corporations
  • Governed by the Florida Business Corporation Act (Ch. 607, Fla. Stat.).
  • Shareholder derivative suits are permitted when officers or directors breach duties owed to the corporation.
  • Shareholders must first make a demand on the board before filing suit, unless doing so would be futile.
• Fiduciary Duties
  • Florida law imposes duties of care, loyalty, and good faith on partners, directors, and officers. Breaches may lead to litigation.

3. Real-World Application

Examples of disputes in Florida businesses:

• A Tampa partnership sues a partner who diverted business opportunities for personal gain.
• A Miami shareholder files a derivative action after discovering corporate funds were misused by directors.
• An Orlando LLC dispute arises when members cannot agree on management decisions, forcing litigation under the Operating Agreement.

4. Why It Matters for Business Owners

Disputes between owners are among the most damaging types of business litigation.

Why it matters:

• Protects the company: Derivative suits ensure directors act in the corporation’s best interest.
• Preserves investment value: Litigation can stop partners or directors from misusing funds or harming reputation.
• Clarifies rights: Courts enforce agreements when members or shareholders are deadlocked.
• Ensures accountability: Officers and directors are held to fiduciary duties under Florida law.

Common mistakes Florida business owners make:

• Failing to draft clear Operating Agreements or Shareholder Agreements.
• Attempting to handle disputes informally without legal guidance.
• Ignoring fiduciary duties, leading to personal liability.
• Misunderstanding derivative suits — they protect the company, not individual shareholders directly.

5. Real-World Florida Examples

• A Sarasota partnership dissolved after litigation revealed one partner was self-dealing at the company’s expense.
• A Jacksonville shareholder recovered funds for the corporation after suing directors for breach of fiduciary duty.
• A Fort Lauderdale LLC resolved a deadlock through litigation that enforced the Operating Agreement’s buyout clause.

6. How Our Law Firm Can Help

At Black Rock Trial Lawyers, our Litigation Department handles partnership and shareholder disputes across Florida. We provide:

• Representation in derivative suits and fiduciary duty litigation
• Enforcement of Operating Agreements, Shareholder Agreements, and buy-sell provisions
• Strategies for resolving ownership deadlocks
• Aggressive litigation in state and federal courts when disputes cannot be settled
• Mediation and negotiation to preserve value when litigation can be avoided

We fight to protect your ownership rights and the value of your business.

7. FAQs (Frequently Asked Questions)

Q: What is a shareholder derivative action?
A: A lawsuit filed by shareholders on behalf of the corporation against directors or officers for harming the company.

Q: Do I need a contract to sue my business partner?
A: No, but an Operating Agreement or Partnership Agreement strengthens your case.

Q: What duties do directors and officers owe in Florida?
A: Duties of loyalty, care, and good faith to act in the best interests of the corporation.

Q: Can an LLC member sue for mismanagement?
A: Yes, LLC members may sue for breaches of fiduciary duty or seek judicial remedies under the LLC Act.

Q: Why hire Black Rock Trial Lawyers for ownership disputes?
A: Our Litigation Department has deep experience litigating complex business disputes and protecting shareholder and partner rights.