Any Business Partner Facing Litigation Should Take This Step First

Business partnership disputes happen. We never enter into an agreement or relationship hoping it ever reaches that point, but people make mistakes and change their minds all the time. This can lead to rifts between business partners that eventually lead to litigation.

As a business partner in a Florida limited liability company (LLC), understanding your rights prepares you for the possibility of litigation down the road.

Access All Business Accounting

Should a partnership dispute end up in court, the first step any partner should take is to request the full financial records of the company. Florida Statute 605.0410 requires that all financial records within a Florida LLC be kept at the principal office and made available upon request to the required parties.

Any partner, even a minority partner, holds the right to request and review these records. This includes documents like operating agreements, a list of names and addresses of each member, LLC tax returns, financial statements for the three most recent years, and several other key accounting records.

Equipping yourself with all of this information provides a thorough overview of the LLC and what options you may have in litigation. Knowledge is power in the courtroom, so the more you know about the circumstances you are facing the better equipped you are to defend yourself (or even turn the tables in litigation).

Recouping Attorney and Court Fees

Using this information to protect yourself in litigation is one thing, but you will still likely be left with attorney and court fees to take care of. Thankfully, partners may have the option to recoup those fees in a partnership account dispute.

The American Rule says that each party must pay its own attorney’s fees, however, disputes surrounding partnership accounting are viewed as a common law exception to this rule. This means if the litigation was related specifically to a partnership accounting matter, the attorney fees of each partner involved may be the responsibility of the partnership and not each individual.

This applies whether you were the target of failed partnership accounting litigation or successfully filed partnership accounting litigation yourself. If the partnership does not have sufficient funds to pay for the attorney fees of each partner involved, then the partners will be proportionately responsible based on their percentage stake in the LLC. Accessing company records ensures everyone is on the same page about what money may be available to take care of these fees.

Work with an Attorney

While all of this is within the letter of the law, an experienced business attorney will play a key role in securing your rights. If you are facing or anticipating litigation by other partners of your Florida LLC, contact Bryant Taylor Law.

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