Ever seen a business partner demand repayment for what you thought was a capital contribution? In Florida, this scenario is all too common—and it’s fueled by confusion over member loans versus capital. The stakes are high: a poorly documented cash infusion can ignite bitter ‘pay me back’ wars, risking litigation and even dissolution.
Florida law draws a sharp line. Under Fla. Stat. § 605.0402, capital contributions are not debts. Unless your operating agreement specifically allows repayment, members can’t demand their money back. Loans, however, are governed by Fla. Stat. § 605.0403 and must be documented with clear terms, interest rates, and repayment schedules. If you skip this step, you’re inviting disputes that can drain your business and damage relationships.
The most common mistake? Relying on handshake deals or vague emails. Every dollar invested in your LLC must be labeled—loan or capital. Update your operating agreement to spell out repayment rights, deadlines, and procedures. If you’re unsure, consult a Florida business attorney before money changes hands. Protect your business, your partners, and your peace of mind.
☎️ Schedule a Legal Consult
📲 Call/Text 24/7: 813-254-1777
🌎 businesslaw.blackrocklaw.com
Disclaimer: This content is for informational purposes only and does not constitute legal advice, and laws and legal interpretations may change after the date of publication.
Written by:
Gil Sánchez, Esq.
CEO | Civil Trial Attorney
Black Rock Trial Lawyers
Abogados Law
